The 5 States Where Obamacare Is Cheapest

Many Americans are worried about the cost of health insurance under Obamacare, and as the Oct. 1 opening of health-care exchange open enrollment approaches, there's been a lot of uncertainty about the premiums that Americans would have to pay. A new report from the Department of Health and Human Services shed some light on costs under the Affordable Care Act, including what residents in each state can expect to pay.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning and author of the special free report "Everything You Need to Know About Obamacare," talks with Motley Fool health-care bureau chief Max Macaluso about the states in which Obamacare policies will be cheapest. Dan and Max discuss the findings, noting that the report looked at the least-comprehensive bronze-level plans and took weighted averages of the costs that residents of each state would bear. For more-comprehensive silver-level coverage, residents in these low-cost states can expect to pay 30% to 50% higher.

Max and Dan then discuss the impact these premiums have on investors. Dan notes that lower prices reflect more competition among insurance companies seeking to provide policies to customers. In low-premium states, heightened competition is in part responsible for lower prices, which in turn could reduce profits. Those competitive pressures could be one reason why Cigna (NYSE: CI  ) , Aetna (NYSE: AET  ) , and UnitedHealth Group (NYSE: UNH  ) have been reluctant to participate in most states' health-insurance exchanges. Yet as Dan points out, WellPoint (NYSE: ANTM  ) has been the exception there, being more aggressive in offering Obamacare plan coverage. In the end, investors need to look at actual medical costs as well as premiums to get a full picture of how profitable each state's business will be.

Learn what you need to know about Obamacare
Obamacare is rewriting the rules for the health-care industry, both for customers and for the companies that serve them. In this free report, Dan walks you through these opportunities and the companies that are positioned to exploit them. The informational edge contained in it is invaluable, but it's most useful now before Obamacare takes full effect. To access this free report instantly, simply click here now.

Read/Post Comments (7) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 28, 2013, at 9:34 AM, gearsofwarking wrote:

    So, where is the list? I am not watching the video. This website sucks.

  • Report this Comment On September 28, 2013, at 11:00 AM, Icy69hot wrote:

    Since Obamacare is considered National Health care then the cost should be set at a National price across the board. The same for each and every state. Why should some be rewarded and others screwed?

  • Report this Comment On September 28, 2013, at 11:14 AM, rosybunny wrote:

    Yeah, MN is no. 1 for lowest! My state :-)

  • Report this Comment On September 28, 2013, at 11:45 AM, PJohnson64 wrote:

    The truth of the video holds true, West Virginia has had insurance companies opt not to enter the exchange. Naturally with the high number low income average for the state the companies and milk the government even more through subsidizing the new policy holders. What a scam.

  • Report this Comment On September 28, 2013, at 12:27 PM, entitled wrote:

    So let me see if I have this straight. I pay around $150/month for a policy with a $5k deductible and get reimbursed for 60% of my medical cost? Yep, that's "Affordable" alright.......Me thinks that that "affordable" Bronze plan really costs (roughly) $550/month (factoring in the deductible), which is what I pay now as an employee co-pay, but I get far more benefits...

  • Report this Comment On September 28, 2013, at 12:47 PM, djbrown62 wrote:

    Obamacare does not directly set rates. It would be unrealistic to try to artificially force rates to be the same in all states. Things cost different amounts in different places. There is a different number of providers in each state which affects competition. Some state also have obstructionist leadership, which may also affect rates.

  • Report this Comment On September 28, 2013, at 10:40 PM, mbee1 wrote:

    Obamacare could set rates in every state, after all we live in all states and everyone of us is equal per the law except the rich are more equal. The reason rates vary is the insurance companies paid the Democrats hundreds of millions in campaign bribes to not make it equal. Canada has equal rates and it somehow works. Money talks, follow the money and you will see the fat cats paying off your politians.

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