Covered California premiums to jump by double digits for second straight year

Aug. 01--Underlying uncertainty about the ongoing health-care fight in Washington, D.C., has bled into the premiums that Obamacare consumers will pay in 2018, California's health insurance exchange said Tuesday.

Peter Lee -- executive director of Covered California, which currently has about 1.4 million enrollees, released his organization's 2018 rate guide for pricing regions from the Oregon border to San Diego County.

Next year, the average premium is expected to go up by 12.5 percent, about one percentage point lower than the rise for this year but still three times higher than the 4 percent premium increases experienced by Covered California members in 2015 and 2016.

Lee said in every year after the exchange started selling plans in 2013, residents have been able to limit their own rate increases by searching for plans offering their desired features and charging lower prices.

"Consumers in California shop and get the benefits of lower rates by shopping," Lee said during a Tuesday news conference in Sacramento.

For some residents, shopping will be a necessity rather than a choice.

Lee said Anthem Blue Cross, which currently offers policies in and outside of Covered California for all 19 of the health exchange's geographic rating areas, will pull back to only four areas in 2018. The other 10 companies offering insurance plans through Covered California intend to stay in their current markets.

Tuesday's announcement means many people will scramble this fall to find new options, said Craig Gussin, a San Diego health insurance broker and a member of the California Association of Health Underwriters' board of directors.

"It's not going to hit as bad as if it were a Kaiser or a Blue Shield, but still, it's a big deal for an organization the size of Blue Cross to leave like this," Gussin said.

According to Covered California's most recent enrollment snapshot -- from March -- Anthem covered about 252,560 Obamacare customers. Lee said about 153,000 of them live in regions where the carrier will pull out of the individual health insurance market. That includes 39,340 people in Los Angeles County, 19,490 in Orange County and 4,340 in San Diego County.

The 153,000 figure doesn't encompass customers who have bought Anthem plans outside of the Covered California exchange. A Covered California spokesman said 150,000 Anthem enrollees are estimated to be outside the exchange.

During Tuesday's news conference, Lee emphasized that the health-care discussion in the nation's capital has made a clear impact on Covered California's premiums for next year. All of the rates listed for 2018 include a special column that takes into account the possibility that President Donald Trump will follow through with his threat to eliminate an estimated $7 billion in subsidies for insurance companies.

Lee said increases in the cost of providing care are responsible for about 7 percent of the state's 12.5 percent average rate increase in 2018. An additional three percentage points are linked to a one-time tax adjustment. And the rest had to do with the Affordable Care Act struggle in Washington, he said.

The expected increases won't be felt by most Covered California policyholders because more than 70 percent of them receive income-based subsidies for their premiums, Lee said. Generally speaking, as these enrollees' premiums rise, so do their subsidies.

Beyond the average premium figure, the specific increases will vary by insurance plan.

In northeastern Los Angeles, for example, Blue Shield plans will go up between 7 percent and 20 percent, depending on the type of coverage purchased and the age of each enrollee. By comparison, Molina Healthcare customers would see a rate increase of 36 percent to 51 percent.

In San Diego County, which has 122,570 Covered California enrollees, premiums for Blue Shield HMO plans would shrink between 3 percent and 16 percent while Molina's rates would climb by 18 percent to 31 percent.

These increases, Gussin said, are likely to start a second round of the dance that started with last year's double-digit premium increases. When premiums climb, he said, consumers start to question whether they want to keep their current doctor or health system so much that they're willing to pay more.

"The biggest thing right now is not to panic, but to take a deep breath and talk to your doctor about what other plans he or she is going to be in next year," Gussin said. "Health insurance brokers also have the ability to look up your doctor and see what other plans they're in."

paul.sisson@sduniontribune.com

(619) 293-1850

Twitter: @paulsisson

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