Covered California premium rates to rise

SAN DIEGO (KUSI) — Health insurance premiums for Covered California are expected to rise by an average of 12.5 percent next year. The announcement was made Monday by officials of the state run health insurance exchange, that receives subsidies from the federal government.

Consumer advocates and health care providers say the uncertain future of Obamacare or the Affordable Care Act is one of the reasons for the rate increases.

According to the state officials in charge of Covered California, the average 12.5 percent increase can be broken down this way; about 7 percent is due to the increased cost of providing medical care. An additional 2.8 percent is for a one-time California tax adjustment. Another 3 percent is attributed to the insurance companies’ unease about possible changes to the Affordable Care Act.

Dr.Ted Mazer, the president-elect of the California Medical Association says the inaction by Congress and President Trump does little to help the insurance market which is struggling to find more stability. “The last thing we need to do is disrupt the marketplace, particularly the individual marketplace and the exchanges, that at least are providing some access. From the perspective of stability, Covered California has done much better than the federal exchanges and some of the state exchanges. That doesn’t mean premiums haven’t escalated and continue to escalate,” Mazer said.

Jan Spenceley, with an advocacy group called San Diegans for Health Care Coverage says most consumers on the exchange will not pay the entire rate change because much of the extra cost will be covered by Obamacare subsidies. She says in her opinion, Covered California is very stable, but consumers need to look carefully for their best options. “We had people last year who were in a health plan that went up quite a bit, but we helped them shop and find how their doctors could be accessed through another health plan,” Spencely said.

One health care insurer is leaving the insurance exchange. Anthem is pulling out of Covered California in most parts of the state. Anthem’s decision to leave the exchange will affect about 4,340 people in San Diego County.

Covered California has asked for more guidance on the funding of the federal subsidy program which reimburses insurance companies for the costs of co-pays and deductibles for low-income consumers. The CSR or cost-sharing reduction payments are in jeopardy because the Trump Administration has stated it will only commit to making those subsidy payments on a month to month basis. As a result, Silver-tier consumers may see an additional “CSR” surcharge averaging around 12.4% tacked onto the gross price of their premiums if there is no commitment from the administration to fund these payments through 2018. While the gross premiums would reflect the added CSR surcharge, consumers in most cases would not see a “net” change in their payments since the federal government would offset the added costs with federal tax credits.

The executive director of Covered California, Peter V. Lee said, “Without clear confirmation from the administration that these payments are secured, we will be forced to have health insurance companies in California add a CSR surcharge to the Silver-tier rates.”  

Categories: Local San Diego News