Pittsburghers fall short on subsidy bucks under health care law
There's a downside to fierce health competition in Pittsburgh that makes premiums for Obamacare coverage the lowest in the state: Philadelphians could get a better deal.
A quirk in calculating subsidies will give Philadelphia residents a bigger discount, allowing them to buy coverage for less money than uninsured Pittsburghers.
High premiums mean bigger tax credits under the Affordable Care Act. The result is lower subsidized costs for people buying coverage on HealthCare.gov outside of Western Pennsylvania — where the state's largest health insurer, Highmark Inc., lowered premiums while battling with UPMC Health Plan.
“Philadelphia has the higher prices, but they will have better subsidies,” said Titus North, executive director of Squirrel Hill consumer advocacy group Citizen Power.
Depending on a person's age and income level, buying a health plan in Pittsburgh could cost more than three times as much as doing so in Philadelphia, the Tribune-Review found in reviewing Obamacare premiums and subsidies.
The law awards discounts through upfront tax credits, primarily to people who don't get coverage from employers, on a sliding scale based on income and the price of a benchmark plan in each market.
Whether intentional or not, Highmark set the benchmark with Community Blue, a plan that excludes UPMC, the region's largest network of hospitals and doctors and Highmark's bitter competitor since the insurer bought West Penn Allegheny Health System in April.
The formula has a big impact on the costs consumers will pay.
A hypothetical 27-year-old making $18,000 a year will pay an annual premium of $1,428 for the lowest-cost plan in Pittsburgh, which is about 40 percent lower than the cheapest premium in Philadelphia. But after applying tax credits, that Pittsburgh plan would cost the person $534 a year — more than three times the $162 after-credit cost on the eastern side of the state.
Chalk it up to another case of Philly trumping the Burgh in government operations?
Highmark defended its pricing and questioned the usefulness of comparing plans in the cities. Each market is unique, with different insurers offering a range of plans, spokeswoman Kristin Ash said.
“It's not that we were intentionally trying to do that,” Ash said.
The benchmark plan in each market is the silver plan, second-lowest in price. Plans range from bronze to silver, then gold and platinum. Highmark sells one Community Blue plan each in bronze and gold levels, but two plans in the silver level.
“Those plans were submitted back when we had no idea what other insurers were going to do,” she said. “Our rate was what we thought the plans would cost.”
But many Pittsburghers will opt for a less-costly Community Blue plan, North predicted.
“They're very unlikely to be able to pay the extra premium to get anything other than Highmark's Community Blue, so they won't have access to UPMC's facilities,” North said.
At the top end of silver plans for sale in Pittsburgh are those from UPMC Health Plan, which cost 70 to 104 percent more than the benchmark. In Philadelphia, the most expensive silver plan is 39 percent more costly than the benchmark.
“Consumers need to be fully informed, as there are trade-offs to be made between price and the access to the providers they want,” UPMC spokesman Paul Wood said.
Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- New J.C. Penney CEO comes from middle-income America
- After years of downsizing, big houses make comeback
- Floating homes offer ‘affordable’ option in San Francisco area
- Corporate America speaking out on social issues, getting results
- Pittsburgh’s tech startup activity rates last of 40 metro areas in report
- Bank of New York Mellon seeks to intervene in N.J. casino saga as power plant taps collateral