Surcharge decision set for Sept. 30

Stymied by federal uncertainties, Covered California has delayed its decision on whether to issue a surcharge for 2018 on “silver” health-care plans.

Problem with health careThe delay results from a lack of direction from the Trump administration on the future of federal subsidy payments.

“The lack of clarity and direction at the federal level continues to be a challenge, and Covered California is doing everything it can to stabilize the market and protect consumers,” Covered California chief Peter Lee said.

Covered California said it will wait until Sept. 30 to decide whether its health plans must add a cost-sharing reduction surcharge (CSR) to silver-tier plans.

“Without any firm commitment to continue those reimbursements through 2018, silver-tier consumers will see an additional CSR surcharge — averaging 12.4 percent — on the gross price of their premiums,” Covered California said.

Silver plans are part of the Obamacare operation’s metal-tier structure for health-care plans. It is typically used by low-income consumers who qualify for subsidies and tax breaks.

“However, in most cases, consumers would not see a ‘net’ change in what they would pay since their premium tax credit would also increase,” Covered California said. The surcharge would vary by region and specific plan, Lee said.

Administrators are walking a fine line between the return of Congress for the fall session and the beginning of open enrollment for health plans on Nov. 1. “We can’t wait past Sept. 30,” Covered California board chairman Diana Dooley said.

The Covered California board also approved contract language that would allow insurance carriers with “unanticipated losses in 2018” due to changes in federal policy “or other uncertainties,” such as the lack of enforcing the individual mandate, to request a recoupment of those losses over a three-year period starting in 2019. Any excess profits as a result of policy changes would be considered going forward as well.

“These actions will protect our consumers and give our carriers the certainty they need to continue providing choice at a good price,” Lee said.

The exchange said earlier this month that insurance premiums would increase an average of 12.5 percent in 2018, not considering the potential surcharge. That rate-hike announcement, too, was postponed by several weeks as the political chaos surrounding health care policy swirled in the nation’s capital.

Lee said the upcoming open enrollment will be “our most challenging since year 1.” The board agreed to hike its marketing budget by $5.3 million for the period (for a total of $111 million).

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