Health in­sur­ance prices in state are on the rise

San Francisco Chronicle Late Edition - - FRONT PAGE - By Cather­ine Ho

The cost of health in­sur­ance con­tin­ues to climb in Cal­i­for­nia.

Es­ti­mates re­leased Thurs­day by Cov­ered Cal­i­for­nia, the state in­sur­ance mar­ket­place, project that pre­mi­ums in the in­di­vid­ual mar­ket will rise 11 per­cent next year, while en­roll­ment in the ex­change — which is larger than any other state’s — will drop 12 per­cent.

A big rea­son is the elim­i­na­tion of a fed­eral re­quire­ment to buy health in­sur­ance, which had been in­cluded in the Af­ford­able Care Act of 2010 but was re­moved last year by the Re­pub­li­can-led Congress. The re­quire­ment, en­forced by threat of a tax penalty, was de­signed to en­sure that even healthy peo­ple bought in­sur­ance, thus bring­ing down the cost of care for ev­ery­one. Repub­li­cans saw it as oner­ous, and their re­peal of the pro­vi­sion takes ef­fect next year.

In Cal­i­for­nia, more than 2.4 mil­lion peo­ple buy

health plans in the in­di­vid­ual mar­ket. That in­cludes nearly 1.3 mil­lion peo­ple who re­ceive Af­ford­able Care Act fed­eral sub­si­dies to buy in­sur­ance through Cov­ered Cal­i­for­nia, and roughly 1.2 mil­lion who buy plans with­out sub­si­dies — typ­i­cally not through the ex­change. Peo­ple whose in­comes are too high to qual­ify for sub­si­dies will likely be hit harder, be­cause they will have to ab­sorb the higher costs on their own with­out fi­nan­cial as­sis­tance.

The pro­jected 11 per­cent pre­mium in­crease in­cludes the ex­pected rise in health care costs over­all, which is about 6 per­cent each year. But these are just es­ti­mates: Fi­nal rates for 2019 will not be re­leased until July, af­ter Cov­ered Cal­i­for­nia fin­ishes ne­go­ti­a­tions with in­sur­ance car­ri­ers. The es­ti­mated 11 per­cent in­crease is less dras­tic than those in some other states, such as Mary­land, where in­sur­ers are re­quest­ing av­er­age pre­mium hikes of 30 per­cent.

This year, Cov­ered Cal­i­for­nia rates were up 12.5 per­cent com­pared with 2017.

Na­tion­ally, in 2019, the unin­sured rate is ex­pected to reach 14 to 16 per­cent — up from the cur­rent 12 per­cent, ac­cord­ing to an anal­y­sis also re­leased Thurs­day by Cov­ered Cal­i­for­nia. This would in­crease the cost of pro­vid­ing care to unin­sured peo­ple by be­tween $1.5 bil­lion and $7 bil­lion in 2019 be­cause more unin­sured pa­tients are ex­pected to seek care at hos­pi­tals and other health providers. If those costs are shifted to pri­vate in­sur­ers, it would lead to a 2 to 4 per­cent in­crease in the cost of em­ployer-spon­sored health cov­er­age, ac­cord­ing to the anal­y­sis. That in­crease would prob­a­bly be shared be­tween the em­ployer and the em­ployee.

Cal­i­for­nia’s unin­sured rate is about 7 per­cent. In 2019, as a re­sult of the man­date’s re­peal, be­tween 475,000 and 1 mil­lion fewer Cal­i­for­ni­ans will be in­sured, ac­cord­ing to the anal­y­sis, which was done by Price­wa­ter­house­Coop­ers for Cov­ered Cal­i­for­nia.

In Cal­i­for­nia, the cost for unin­sured pa­tients is ex­pected to grow by $420 mil­lion to $1 bil­lion, ac­cord­ing to the anal­y­sis.

Health pol­icy ex­perts an­tic­i­pate that some peo­ple may not buy cov­er­age next year if they are not re­quired by law to get it. That would leave the re­main­ing pool of cus­tomers on the ex­change, who are likely to be older and sicker, with higher costs.

Aris­teo Al­varez of San Jose said he is con­sid­er­ing drop­ping his Cov­ered Cal­i­for­nia Blue Shield plan next year and in­stead sign­ing up for a cheaper plan cov­er­ing only emer­gen­cies, be­cause he rarely needs to go to the doc­tor. Al­varez, 42, re­ceives fed­eral sub­si­dies and pays about $270 a month in pre­mi­ums.

“I don’t know what the cost is yet, but if it’s too high, then most likely I’ll look else­where for some­thing else,” said Al­varez, who works at a jew­elry store and drives part time for Uber.

To­day, the emer­gency cov­er­age — of­ten called a “cat­a­strophic plan” — does not meet the re­quire­ments un­der the Af­ford­able Care Act, so peo­ple who buy such plans must pay a tax penalty. But start­ing in 2019, pa­tients can buy these types of plans and not pay a penalty. Some peo­ple pre­fer lower-cost cat­a­strophic plans if they rarely need rou­tine med­i­cal care, but are cov­ered in the event of emer­gen­cies. How­ever, they typ­i­cally have to pay for all med­i­cal care up to a cer­tain amount, of­ten sev­eral thou­sand dol­lars, be­fore in­sur­ance kicks in.

Tif­fany Lin, a 29-year-old free­lance artist who has a Kaiser plan through Cov­ered Cal­i­for­nia, said she would con­tinue buy­ing the in­sur­ance just in case — even though she is rel­a­tively healthy. Lin pays just $1 each month in pre­mi­ums be­cause her in­come qual­i­fies her for sig­nif­i­cant sub­si­dies. But her co-pays are sub­stan­tial: $100 for lab tests and $75 for doc­tors’ vis­its. Lin some­times puts off lab workups and some med­i­cal vis­its, such as phys­i­cal ther­apy ap­point­ments for her mild sco­l­io­sis, to save money.

“I would keep it, be­cause I like the idea of still hav­ing a health provider, even though it’s been ex­pen­sive,” said Lin, who lives in Cu­per­tino. “I would hate that if any­thing did hap­pen, I didn’t have any­where to go and I’d have to pay even more out of pocket.”

Tony Ave­lar / Spe­cial to The Chron­i­cle

Tif­fany Lin, an artist , has Kaiser in­sur­ance through Cov­ered Cal­i­for­nia. Her pre­mi­ums are low but co-pays are high.

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