Unhealthy markets
While the Affordable Care Act is still the law of the land, it has been significantly weakened by actions taken by Congress and the White House since 2017. Covered California, the state exchange that sells insurance to 1.3 million people, is starting to quantify the damage.
According to the organization’s analysis, people across the country should expect premium increases between 12 and 32 percent in 2019.
Covered California didn’t break out projections for California, but an analysis from the Urban Institute has shown that California premiums will increase by 18 percent next year.
Without action in Washington, premiums will continue to rise year after year. Covered California’s analysis predicts premium hikes of 35 percent by 2021 in 15 states, including California. Seventeen states will see 90 percent premium spikes by 2021.
“The prospect of 30 percent premium increases in 2019 and hikes of over 90 percent over the next three years threatens access to coverage for millions of Americans,” said Peter Lee, Covered California’s executive director, in a statement.
There are simple policy solutions to this problem.
Last year’s congressional action to remove the federal penalty for being uninsured is one of the reasons for the forthcoming premium increases. That penalty needs to be restored.
A nationwide reinsurance program (a reimbursement program to protect insurers from very high claims) with approximately $15 billion in federal funding would save consumers 16 to 18 percent in premium increases. Such a reinsurance program would result in a reduction of the federal government’s tax credit payments, so the ultimate cost would be far less than $15 billion.
Finally, an investment in outreach would improve signup rates. After a year of hearing Congress threaten to end the Affordable Care Act, many Americans became confused and concerned about their ability to secure health insurance. They need to be reached and reconvinced to sign up for coverage.
Taken together, these three actions would dramatically reduce the premium increases that are threatening millions of people in California and the rest of the nation with the loss of their health insurance.
Congress knows what to do. Its failure to act is a disgrace.