Insurance

Insurance could also increase

By Tanu Henry
California Black Media

As gas and food prices continue to rise at a rapid pace, Californians could be hit with sticker shock from another skyrocketing bill later this year: their premiums. ‘Health Insurance.

According to Covered California officials, monthly premiums for insurance coverage could soar by as much as 100% — an average of about $70 — for more than 2 million Californians if the federal government subsidies provided by the plan US bailouts are allowed to expire at the end of 2022.

An estimated total of 14 million Americans could be affected by the price hike.

“The U.S. plan builds on the Affordable Care Act and has provided more financial assistance than ever to help people get covered and stay covered in large part in response to the pandemic,” said Peter V. Lee, former executive director of Covered California.

Lee was speaking at a press briefing earlier this month to inform the public of what he sees as a looming crisis if the federal government does not act.

On the sidelines of this virtual meeting, Lee announced that he was leaving Covered California.
In February, the agency’s board of directors announced that Jessica Altman, a former Commonwealth of Pennsylvania insurance commissioner, would be Covered California’s new chief executive.

Lee said the funds the federal government is now providing to states to help reduce health care premiums for Americans has led to record enrollment numbers across the country, including about 1.8 million new enrollments. in California.

The largest enrollment increases in California were for African Americans and Latinos.

About 90% of covered California enrollees received premium discounts through the program.

“The US bailout increased affordability by paying a larger share of consumers’ monthly premiums. As a result, the share consumers are paying has dropped significantly by 23% nationally and 20% here in California,” Lee said.

“Those are big drops. That meant two-thirds of our consumers were eligible for a plan that cost $10 or less,” Lee continued. “For a low-income consumer, low cost is an essential ingredient in obtaining and maintaining coverage.”

Covered California is the Golden State’s federally subsidized public insurance marketplace where individuals and businesses can purchase health care plans.

Lee said nearly $3 billion from the U.S. bailout has allowed California to subsidize insurance costs for more middle-income people. The eligibility window has been expanded to include Californians earning up to $52,000 as a single person or $106,000 as a family of four.

Before US bailout aid took effect, hundreds of thousands of Americans were paying up to 30% of their income for insurance, according to Covered California.

If the federal supplement expires, “those who can least afford it would be hit hardest,” lee warned.

Lee says the program is helping middle-income people more than ever.

“In California today, approximately one in 10 of our subsidized enrollees earns more than 400 percent of the poverty level. They are receiving needed and meaningful financial assistance,” Lee said. “Without the extension of the U.S. bailout, those gains would be wiped out and consumers would face staggering cost increases.”

Lee says if the federal grants expire, the loss of funding will also hurt people who don’t qualify for the grants and who pay insurance at market rates.

He estimates that for Californians earning more than $52,000 a year, premiums could increase by an average of more than $270 a month or nearly $3,000 a year.

“As people drop their coverage, the higher premiums would be felt by everyone. When you assess people out of coverage, the people who drop out of coverage first are healthy people. If you get sicker, you keep your coverage,” Lee said.

“What does that mean? If US bailout subsidies aren’t continued, we’ll most likely see a spike in premiums. As the health plans say, “next year will be the year when we will have fewer insured, they will be sicker on average, we will have to increase our premiums,” Lee said.

If the U.S. Congress doesn’t act to make the subsidies permanent — or at least extend them — Californians will first see the new amount increased to their monthly premiums in the fall when they receive their renewal notices for 2023.