First it was Oregon, then California. Now New York weighs in, showing that the Affordable Care Act is going to reduce the cost of health insurance premiums for many subscribers.
State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.Those dramatically reduced premiums are a reflection of New York's somewhat unique individual market for health insurance. In 1993, the state passed a law requiring insurance companies to take all comers, regardless of pre-existing conditions. But the law didn't include a mandate for individuals to sign up. Without the presence of a younger, healthier, premium-paying bunch of people in the pool, insurance premiums skyrocketed. That's one of the reasons that only about 17,000 New Yorkers who don't have employer-based insurance buy it on their own. There are 2.6 million uninsured people in the state.
Supporters of the new health care law, the Affordable Care Act, credited the drop in rates to the online purchasing exchanges the law created, which they say are spurring competition among insurers that are anticipating an influx of new customers.
The savings seen in New York's market aren't going to be reflected in all states because it does have a unique individual market. But for the 2.6 million uninsured in that state, that doesn't matter: They'll be able to afford health insurance now, and that's a big deal.