California’s Obamacare premiums will jump 13.2 percent on average next year, a sharp increase that is likely to reverberate nationwide in an election year.
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Within regions, rate hikes vary by insurer.
Rate hikes for Covered California policies in the last two years came to about 4 percent, putting the three-year average at 7 percent. Those programs kept rates low the first few years of the ACA, by subsidizing plans that enrolled high-cost consumers.
“Shopping is going to be more important this year than ever”, said Covered California Executive Director Peter Lee. The exchange’s fall open enrollment period is supposed to stop this from happening, but a year-round special enrollment process allows anyone to sign up if they have certain qualifying “life events” such as getting married or moving to a new state. Among private health payers, the report notes that health insurance spending growth will also hit 5.6 percent from 2015 to 2025.
The proposed rates are subject to review by state regulators, who can label them as unreasonable but can’t block them. That’s a real possibility for most Californians, given how much higher the increases at Anthem and Blue Shield were than at other plans.
Over the past three years, many individuals and families, who previously had health coverage with their employers, have been cut off of plans and pointed in the direction of the health exchange with the threat of being fined by the Internal Revenue Service each year they fail to purchase coverage that meets the ACA guidelines.
Lee said prices for 2017 reflect the rising cost of care, not efforts by insurers to increase their profits. Factoring in other insurers who asked for lower rate increases, the average increase is just above 13 percent. The end of the reinsurance program is worth a 4 percent or 5 percent premium increase, estimated Gary Claxton, vice president of the Kaiser Family Foundation.
The California Association of Health Plans also released a new infographic that illustrates the primary and secondary factors impacting 2017 health coverage premiums.
Premiums will go up more than 17% on average at Anthem Blue Cross and almost 20% at Blue Shield, the two insurers with the most customers in Covered California. “California consumers can not continue to pay more for very limited doctors and hospital networks”.
National health spending is projected to exceed $10,000 per person for the first time in 2016, according to an announcement from federal health officials. That figure adds to the estimates that the Medicare actuaries had predicted in October 2014; back then, the actuaries predicted that annual healthcare spending would reach $5.1588 trillion in 2023, and 19.3 percent of the nation’s gross domestic product.
That unpopular decision quickly moved people into coverage that fully complied with the health law and created one giant risk pool for rating purposes. Some benefits cited in the report are that medical price inflation slowed down in 2015 to only 0.8 percent and hospital price growth also declined to 0.9 percent growth previous year.
Hillary Clinton would like to further enshrine the reactionary Affordable Care Act and, while claiming to support a few modest expansions to Medicaid and Medicare, her statements are nearly indistinguishable from Obama’s when the act was first introduced.
The expansion of Medi-Cal, the state’s Medicaid program for lower-income residents, accounts for a significant part of that reduction.
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This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.
