As Congress dawdles, a million Californians could see health insurance costs double

One million lower-income Californians are at risk of seeing health insurance premiums double next year–and 220,000 could become uninsured altogether–as action to keep their costs down remains stuck in Congress.

Help for California health care consumers was part of the American Rescue Plan, a COVID-inspired 2021 federal package intended to keep people insured as the pandemic persisted.

Overall, premiums for insurance through Covered California, the state-run health program created through Obamacare, are slated to go up an average of 6% statewide next year. Premiums in Sacramento, Placer, El Dorado and Yolo counties would go up 4.7%.

Other anticipated changes: San Joaquin, Stanislaus, Merced, Mariposa and Tulare counties, up 5.6%, and San Luis Obispo County, up 5.1%. Fresno, Kings and Madera Counties are expected to see no increase.

While California’s rate of increase is below the national average of 10%, the more crucial issue for consumers is whether Congress renews the subsidies it approved in 2021, help due to expire at the end of this year.

Subsidies would cut costs

The increase in premiums could be cut by about one-half of a percentage point if Congress continues the subsidies. Unless Washington acts soon, it could become too late to keep the reduced rates intact in 2023.

Californians are due to receive about $1.7 billion in subsidies this year. About 1.7 million people buy insurance through Covered California, and another 600,000 purchase it via the state’s health care marketplace exchange.

Those programs, created under Obamacare, are designed to make choosing coverage easier and more affordable for people who traditionally have struggled to find quality health insurance.

Without the increased subsidies, those who could see costs go twice as high are individuals earning between $17,775 and $32,200 a year and a family of four with an income of $36,570 to $66,250.

Without the 2021 subsidies, their premiums would rise from the current $65 a month to an estimated $131.

For individuals making between $32,201 to $51,520,or 250 to 400% of the poverty level, the premium would jump from the current $168 to $246 a month.

These lower income consumers will continue to get some help with their premiums, thanks to the Obamacare law passed in 2010.

The 2021 measure also provided help for middle income people, those making more than $51,520 as an individual and $106,000 for a family of four. The amount of aid depends on factors such as age, place of residence and whether health insurance costs exceed 8.5% of income.

Those people “would no longer be eligible for any financial help and would face higher monthly premium costs that for many will mean annual cost increases in the thousands of dollars,” said a Covered California analysis.

That report predicted their costs would go up from the current average of $361 to $633 a month.

That in turn could mean fewer people will buy coverage. Those most likely to drop their plan, regardless of income, would likely be the younger and healthier, according to Covered California. One of Obamacare’s primary missions has been to provide affordable health care coverage to virtually everyone.

Will Congress act?

Prospects for continuing the federal aid are becoming brighter, but are not assured. Efforts stalled as Democrats tried to combine an extension with climate change and higher taxes on the wealthy.

Sen. Joe Manchin, D-W.Va., said he wouldn’t back climate and tax provisions. He has said he’d support a two-year extension of the health insurance aid. Since the Senate has 50 members who caucus with Democrats, and 51 votes are likely needed (Vice President Kamala Harris would break a tie) to approve the extension, Manchin’s vote is crucial.

One problem: Time is running out. The House is scheduled to leave next Friday for summer recess, returning on September 13. The Senate is due to depart a week later and return September 6.

Jessica Altman, Covered California executive director, called the fate of the subsidies “the biggest factor that will impact what Californians will pay” for their coverage.

“The longer we go, the more disruption and confusion there will be,” she said.

While Covered California’s role in managing and negotiating with health plans has been an important factor in keeping rate increases modest, “congressional action is the biggest factor in what almost two million Californians will pay for their health care next year,” said Diana Douglas, Manager of Policy and Advocacy at Health Access California, the statewide health care consumer advocacy coalition.

2023 premiums notices “hit mailboxes in October,” Altman said, with open enrollment starting in November.

The 6% increase

The average statewide 6% 2023 premium increase would be well above 2022’s 1.8% increase and 2020’s 0.5%, as inflation and a return to more traditional medical care has driven up costs somewhat. The rates are subject to a final review by the state’s Department of Managed Health Care.

Covered California will add a new plan next year, Aetna CVS Health, in El Dorado, Fresno, Kings, Madera, Placer, Sacramento and Yolo counties. And Anthem Blue Cross will return to San Diego County and will join Blue Shield of California as the second carrier to offer statewide coverage.

A total of 13 companies will provide coverage across California, meaning state residents will have at least two choices, and 93% can pick from three or more carriers.

©2022 The Sacramento Bee. Visit sacbee.com. Distributed by Tribune Content Agency, LLC.