Covered Cal: Insurance chaos ahead

Californians’ health insurance premiums could rise by almost 50 percent if the Trump administration succeeds in gutting the Affordable Care Act, the state’s marketplace warns.

insurance premiums skyrocketAs many as 340,000 Californians could lose health coverage under proposed changes to Obamacare, Covered California warned April 27.

“This specter of uncertainty could lead to dramatically higher rates,” said Peter Lee, chief of the state Obamacare operation.

The doomsday scenario plays out if there is “no longer direct federal funding of cost-sharing reduction reimbursements and the individual shared responsibility payment is not enforced when a consumer chooses not to purchase coverage,” Covered California said.

The health-care analysis said premiums could rise between 28 percent and 49 percent.

The analysis was commissioned by Covered California and conducted by PricewaterhouseCoopers. “Failure to support cost-sharing reduction subsidies results in significant increases in premiums, in particular for unsubsidized Silver plans. Fewer people would participate with these higher premiums, which would lead to a drop in coverage in the unsubsidized market,” said Sandra Hunt, principal at PwC.

The Trump administration has been wooing conservative lawmakers in a bid to “repeal and replace” the Affordable Care Act. A previous attempt to overhaul health care went down in flames last month. The latest proposal targets Obamacare protections for consumers with pre-existing conditions.

Lee urged the federal government to provide clarity on these issues as soon as possible, saying health plans are finalizing rates that need to be locked down by June 15.

“While Californians face significant uncertainty, in many other parts of the nation the premium increases would be far larger, and it is possible that many areas would have no health plan offering coverage in the individual market,” Lee said. “The cost of inaction or indecision is high and consumers, particularly those who do not get any financial help, will end up bearing the cost.”

U.S. Sen. Dianne Feinstein cited “devastating consequences for California families” if the Trump administration halts insurance subsidies and the individual mandate that requires almost all Americans to carry coverage.

“As public servants, our job is to solve problems, not make them worse,” Feinstein charged. “It’s outrageous that the Trump administration would consider hurting Americans to advance a political argument by sabotaging the individual health insurance market nationwide.”

California state lawmakers have proposed moving to a “single payer” health care system, under which payments for care would come from the state government. The governor has declared the proposals absurd.

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