12.4% surcharge on silver plans

Covered California’s popular silver-tier products will see a 12.4 percent surcharge in 2018, the state health insurance exchange said.

Obamacare in California logo - health exchangeCalifornia’s insurance commissioner pointed the finger at the Trump administration.

“Thanks to President Trump’s and congressional Republicans’ inaction, the 2018 health insurance rates are higher than they would otherwise be,” said California Insurance Commissioner Dave Jones.

The total insurance premium increase for the silver health-care plans will be almost 25 percent next year. Covered California had delayed issuing its final rates in hopes that the administration would clarify its policies regarding cost-sharing subsidies (CSRs), but that didn’t happen.

The state Obamacare operation cited “the ongoing uncertainty at the federal level” and noted the surcharge “will vary for each health insurance company and will range from 8 percent to 27 percent.”

Covered California chief Peter said: “While some consumers will face higher costs than expected this year unrelated to the CSR surcharge, they can still shop for a better deal to reduce the impact of the surcharge.”

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.

Almost all Covered California clients receive some sort of subsidies. Most consumers who receive financial help in the form of an Advanced Premium Tax Credit will not see a change in what they pay for their insurance in 2018, the insurance exchange said.

The new rates can be viewed via the updated Covered California rate calculator. Consumers were warned in August that health premiums would increase by at least 12.5 percent statewide. Administrators walked a fine line between the return of Congress for the fall session and the beginning of open enrollment for health plans on Nov. 1.

The state’s open enrollment period, which is longer than that for the federal exchange, runs through Jan. 31.

Covered California downplayed the impact of the surcharge:

A Covered California analysis on the impact of the CSR surcharge found that 78 percent of subsidized consumers would either see no change in what they would pay for insurance in 2018, or would pay less than what they would have paid if there had been no CSR surcharge. The remaining 22 percent will see some form of higher net premium because of the CSR surcharge, and about half of them will see increases of less than $25 per month.

Lee insisted: “The big story is not the fact that we need to have plans apply a CSR surcharge, but rather the fact that with the financial help consumers can get at Covered California, we continue to bring health care within reach for so many Californians.”

Those Californians who do not receive financial help and buy their insurance directly from carriers are not affected by the surcharge. Those on the silver plan without financial help should switch to a different insurance metal level — or buy directly from an insurer.

If the CSR payments are made at the federal level, insurance carriers will be required to return the excess premiums at some point in the future.

Jones, the insurance commissioner, said: “We all waited and waited for the Trump Administration and the Republican-controlled Congress to follow the law and commit to funding the 2018 cost-sharing reductions in the Affordable Care Act. State Insurance Commissioners, health care advocates, and health insurers all made clear that rates for 2018 needed to be finalized by early September.

“President Trump and dongressional Republican leaders spent their time working to repeal the ACA and destabilizing the health insurance market, rather than taking the simple step of funding the CSR program that reduces deductibles and other out-of-pocket costs for consumers.”

Jones, a strong supporter of President Obama, is expected to run for state attorney general in 2018.

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