Sticker Shock: Thousands of Californians are discovering what Obamacare will cost them — and many don’t like what they see. These middle-class consumers are staring at hefty increases on their insurance bills as the overhaul remakes the healthcare market. Their rates are rising in large part to help offset the higher costs of covering sicker, poorer people who have been shut out of the system for years, experts say sharp price increases for individual policies have the greatest potential to erode public support for President Obama’s signature legislation.
Jennifer Harris thought she had a great deal, paying $98 a month, her current plan does not conform with the new federal rules, The cheapest plan she has found will cost her $238 a month. “It doesn’t seem right to make the middle class pay so much more in order to give health insurance to everybody else,” (BUT OK FOR THE RICH???)
They are guaranteed coverage regardless of their medical history. And lower-income families will gain access to comprehensive coverage at little or no cost. The federal government picks up much of the tab through an expansion of Medicaid and subsidies to people earning up to four times the federal poverty level. That’s up to $46,000 for an individual or $94,000 for a family of four. But middle-income consumers face an estimated 30% rate increase, on average, in California due to several factors tied to the healthcare law. Defections could cause rates to skyrocket if a diverse mix of people don’t sign up for health insurance. Blue Shield of California sent termination letters to 119,000 customers last month whose plans don’t meet the new federal requirements. About two-thirds of those people will experience a rate increase from switching to a new health plan, according to the company. HMO giant Kaiser Permanente is canceling coverage for about half of its individual customers, or 160,000 people, and offering to automatically enroll them in the most comparable health plan available.
The 16 million Californians who get health insurance through their employers aren’t affected. Neither are individuals who have “grandfathered” policies bought before March 2010. All these cancellations were prompted by a requirement from Covered California, the state’s new insurance exchange. The state didn’t want to give insurance companies the opportunity to hold on to the healthiest patients for up to a year, keeping them out of the larger risk pool that will influence future rates.
Peter Lee, executive director of Covered California, “People could have kept their cheaper, bad coverage, and those people wouldn’t have been part of the common risk pool,” Lee said consumers need to consider all their options. Higher premiums are only part of the cost equation. Lee said some of these rate hikes will be partially offset by smaller deductibles and lower limits on out-of-pocket medical expenses in the new plans.
Deborah Cavallaro, a real estate agent in Westchester, received her cancellation notice from Anthem Blue Cross this month. The company said a comparable Bronze plan would cost her 65% more, or $484 a month. She doubts she’ll qualify for much in premium subsidies, if any. Regardless, she resents losing the ability to pick and choose the benefits she wants to pay for.
Bob Cosway, a principal and consulting actuary at Milliman Inc. in San Diego, estimated that the average individual premium in 2014 will rise 27% because of that difference alone. Individual policies must also cover a higher percentage of overall medical costs and include 10 “essential health benefits,” such as prescription drugs and mental health services. The aim is to fill gaps in coverage and provide consumers more peace of mind. But those expanded benefits have to be paid for with higher premiums. The federal law also adjusts how rates are set by age, a change that gives older consumers a break and shifts more costs to younger people. Rates by age can vary by only 3 to 1 starting next year as opposed to 6 to 1 in some cases now in California. “It has the effect of benefiting people in their 50s and 60s and shifting costs to people in their 20s and 30s,” said Patrick Johnston, president of the California Assn. of Health Plans. “Benefits are being increased for all, but it’s not government subsidies for all. Rates would be going up regardless of changes from the healthcare expansion. The average individual premium will climb 9% next year because of rising healthcare costs and increases in medical provider reimbursement, according to Milliman’s estimates. . Under federal rules, insurers can be ordered to issue rebates if they don’t spend a minimum amount of every premium dollar on customers’ medical care.
Sources—la times, ann coulter, gop usa, the blaze, above