Maine residents who buy midlevel plans in the health insurance marketplace created under the Affordable Care Act will pay more than the national average but less than what individuals have paid in the past.

Health care coverage is more costly in Maine because it is a rural state with an older population and lacks insurance competition, experts said Wednesday.

Mainers who enroll in the insurance marketplace will pay, on average, $403 a month for midlevel plans before tax credits potentially lower the cost, according to a report released Wednesday by the U.S. Department of Health and Human Services.

That compares with the national average of $328 per month and ties Maine with Indiana for sixth-highest out of 47 states and the District of Columbia. Data for all states was not available.

The rates are considered “sticker prices” and do not include subsidies that could lower premiums significantly and put Maine on par with other states, according to the report.

The health insurance marketplaces, previously known as exchanges, are set to open Oct. 1 as part of the Affordable Care Act. The coverage begins Jan. 1.

Even the most expensive premiums will be less than the premiums for the most common individual plans that have been available in Maine, health experts said.

“One of the most common insurance plans was the … $15,000 deductible, catastrophic plan. That wasn’t really health insurance. That was just protecting someone from losing their house under the weight of bills,” said Wendy Wolf, president and CEO of the Augusta-based Maine Health Access Foundation, whose mission includes improving access to quality health care.

Some plans in Maine with $15,000 deductibles cost several hundred dollars a month, according to data from the Maine Bureau of Insurance. Under the Affordable Care Act, co-payments and deductibles in individual policies will be limited to $6,350 a year.

The new plans will let consumers choose their coverage level, from “bronze” to “platinum,” and offer different plans within each level.

The plans will offer the same coverage but vary in price based on deductibles and co-payments.

“Now, there’s richer benefit packages. It’s real insurance,” Wolf said. “You can’t compare the ACA plans to the $15,000 deductible plans. It’s apples versus lemons.”

Subsides or tax credits will reduce the price of plans for many consumers.

For example, a family of four in Maine – a 40-year-old adult and a 38-year-old adult with two children younger than 18 – with annual income of $50,000 will pay $961 a month, before tax credits, for the second-lowest, silver plan.

After tax credits, the cost will be $282 a month for that family – the same rate as in other states, according to the report.

A 27-year-old Mainer who earns $25,000 a year and picks the least expensive plan will pay $96 per month. That figure reflects upfront tax credits that will lower the monthly premium from $216.

The costs for Maine are weighted averages across the state. Premiums will be slightly higher in rural areas and lower in more populated areas.

“The costs after the subsidies are what will matter for most people,” said Mitchell Stein, public policy director for the Maine advocacy group Consumers for Affordable Health Care. “The subsidies are what put the ‘affordable’ in the Affordable Care Act.”

While the subsidies will help people with lower incomes, some who buy in the marketplace will pay full rates. In Maine, that means higher rates and less choice than in other states.

In 36 states that were evaluated in the DHHS report, individuals will choose from among an average of 53 qualified health plans. In Maine, there will be only 20 plans.

On average, each state will have eight health insurance companies competing for subscribers. Maine will have only two, Anthem Blue Cross and Blue Shield and Maine Community Health Options.

The study says more competition means lower prices. The states with the lowest average premiums tend to have more insurance providers offering plans.

Besides having only two companies competing in the marketplace, Maine faces several issues that increase the cost of health care, experts said.

“There’s an issue of demographics,” said Stein, “with Maine being the oldest state. We’re rural and spread out, so we have small hospitals with no economies of scale to save money. And we have some markets where there is a lack of competition.”

Maine ranks fifth among the states for per-capita health care costs, according to 2009 federal statistics. Maine’s costs averaged $8,521 per person in 2009, the most recent year for which statistics are available from the Centers for Medicare and Medicaid Services.

One of the biggest factors is that the median age of Maine residents – 43.5 years – is the oldest in the nation, according to the U.S. Census. The state’s proportion of people 65 and older is second only to Florida’s.

The state also has higher costs because it is largely rural, Stein said. Many regions have a lack of competition among health care providers. And small, rural hospitals have limited ability to save money.

For example, a rural hospital must pay for basic staffing, heat, security and other fixed costs. With fewer patients to cover the costs, each patient ends up paying more for each visit than at a hospital with more patients.

Also, small hospitals have less bargaining power with their vendors because they buy fewer supplies than larger hospitals.

Nationally, the rates released by the DHHS are 16 percent less than those originally expected by the Congressional Budget Office.

“We are excited to see that rates in the marketplace are even lower than originally projected,” said Health and Human Services Secretary Kathleen Sebelius in a prepared statement. “In the past, consumers were too often denied or priced-out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable.”

The Obama administration released the state-by-state cost estimates as some congressional Republicans continued their attempts to defund the Affordable Care Act.

Jessica Hall can be contacted at 791-6316 or at:

jhall@pressherald.com

Kevin Miller can be contacted at 317-6256 or at:

kmiller@mainetoday.com