Lower increase than past years
In July, Covered California announced a modest rate change for 2019, and said many enrollees will be able to mitigate the impact if they shop and switch to the lowest-cost plan in the same metal tier. The exchange also described how the recent federal decision to eliminate the penalty for the individual mandate will raise costs for the federal government and all consumers in the individual and employer-sponsored markets.
“It is unfortunate when a rate change of nearly 9 percent is generally viewed as good news, when the rate change could — and should — have been much lower,” said CC Executive Director Peter V. Lee.
Consumers in both CC and off-exchange in the individual market will see an overall average statewide rate increase of 8.7 percent to their gross premiums if they renew coverage in the same plan for 2019.
The proposed rates were negotiated with CC and filed last month with regulators, who will review them. Those who receive a subsidy to help purchase coverage will pay an average of 6 percent more if they renew in the same plan next year, according to the CC press release. After tax credits, the estimated monthly premium will be about $123. Subsidized consumers, who represent about 88 percent of CC’s enrollment, will incur increases in the subsidies along with rates to help offset any increases.
“Health care is local, and the price of coverage varies by health plan and region, so consumers will be encouraged to shop when they renew this fall,” Lee said.
All 11 insurers currently serving CC will return for the 2019 coverage year. CC’s competitive marketplace continues to promote choice, with 96 percent of consumers being able to choose from two insurers or more, and 82 percent of consumers having three or more choices.
The Hill is part of Region 17, which includes both Riverside and San Bernardino counties. Total enrollment is about 123,000 people and the average rate change this year is 9 percent.
Impact of federal changes on California rates
Lee said the elimination of the penalty for those who choose not to buy health insurance had a negative impact on rates for 2019. Carriers added between 2.5 and 6 percent to their rates, with an average of 3.5 percent, due to concerns that the removal of the penalty will lead to a less healthy and costlier consumer pool.
Subsidized consumers will be protected from this increase, since the amount of financial help they receive also will increase. The federal government will end up paying an estimated $250 million more in higher tax credits. Unsubsidized consumers on- and off-exchange will bear the full brunt of the increase.
“The cost of the penalty removal will manifest for unsubsidized consumers in higher rates. While subsidized people will not bear the full costs, taxpayers will,” Lee said. “The additional losers from this policy change will be those who decide to roll the dice, go without coverage, and end up with hundreds of thousands of dollars in medical bills.”
The elimination of the penalty for going without health insurance will likely affect enrollment, according to CC. The elimination of the individual mandate penalty could reduce enrollment in California’s individual market by 262,000 consumers in 2019, CC estimated.
Other factors influencing the rates include “medical trend” — or the general change in the cost and usage of medical services and products — which accounts for 7.5 percent of the rate change. Also, the federal suspension of the health-insurer tax for 2019 kept rates about 1.6 percent lower than they might have been.
Health insurance information
Consumers can find out what they will pay for their 2019 coverage starting during the renewal period in October. At that time, they can visit CC’s website at www.CoveredCA.com and begin using the Shop and Compare Tool for 2019.
Consumers who do not have health insurance will be able to begin signing up for 2019 coverage on Oct. 15. Others with special qualifying life events, such as losing their coverage or moving, can enroll year-round. Medi-Cal enrollment also is year-round.
Interested consumers can visit www.CoveredCA.com to find out if they qualify for financial help and find free local help to enroll. They can also contact the CC service center for enrollment assistance at 800-300-1506.