California ‘Obamacare’ premiums to rise 8.7 percent in 2019
SACRAMENTO (AP) — Monthly health insurance premiums sold under former President Barack Obama’s health care law will rise by an average of 8.7 percent in 2019, less than the double-digit increases seen in each of the past two years and in other states.
The boost would be closer to 5 percent if not for the decision by Congress and President Donald Trump to eliminate the penalty for people who don’t carry insurance coverage, said Peter Lee, Covered California’s executive director. The penalty was credited with keeping rates down by driving healthier people into the market, but critics say nobody should be forced to buy a health plan.
Covered California sells health plans to about 1.4 million people who don’t get coverage from an employer or from the two large government-funded programs, Medicare and Medi-Cal. The exchange is a central piece of Obama’s health insurance overhaul, allowing people to compare policies and collect a subsidy if they qualify based on income.
Covered California customers who get federal tax credits to lower their monthly premiums will be shielded from all or part of the higher costs because their subsidies will rise in tandem. But the higher prices will be felt by the more than 1 million Californians who have unsubsidized coverage in the individual market, whether they get their plans through Covered California or not.
Obama’s health care law required individuals and large businesses to buy health coverage or face a hefty fine, but Trump and Congress eliminated the penalty starting in 2019. Lawmakers in some states have adopted their own mandates to preserve the requirement, but the idea has not been significantly debated in California’s Legislature.
Avalere Health, a Washington-based consulting firm, reported last month that 2019 premiums for the silver plans — a mid-tier plan and the most popular option — were up by an average of 15 percent in 10 states and the District of Columbia.
Lee attributed California’s smaller increases to healthy competition among plans and aggressive marketing efforts to encourage people to buy coverage, ensuring the market isn’t dominated by sick people who are expensive to cover.