The inevitable rates increases are in for California’s private health insurance operation and the news is good, sort of.
Covered California said rates will rise an average of 8.7 percent for 2019. That’s less than the dire projections for most of the country, and follows two straight years of double-digit premium-rate hikes in California.
The state Obamacare operation termed the increase “a modest rate change for 2019.” That’s little comfort, presumably, for those struggling to pay their health costs.
“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 Covered California chief Peter Lee.
Lee said the elimination of the federal tax penalty for those who don’t buy health insurance had a negative impact on rates for 2019. (The so-called “individual mandate” remains in effect for 2018.) Carriers added between 2.5 and 6 percent to their 2019 rates citing concerns that the removal of the penalty will lead to a less healthy and costlier consumer pool.
“The cost of the penalty removal will manifest for unsubsidized consumers in higher rates,” Lee said. “While subsidized people will not bear the full costs, taxpayers will. 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.”
Covered California expects to lose about 262,000 consumers out of its base in 2019 because of the federal move. The state Obamacare operation saw its first dip in enrollment at the end of the 2018 sign-up.
Other factors influencing the rates include the increased cost of medical services and products — accounting for 7.5 percent of the rate change, Covered California said. The federal suspension of the health insurer tax for 2019 kept rates about 1.6 percent lower than they might have been.
The rate increase cited is an average, which varies by region. The highest average rate changes will be felt in the Monterey region 9 (16 percent) and in northeast Los Angeles (10 percent).
Consumers will be able to see their actual premiums — and change plans, if necessary — when open enrollment begins in October.
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