California ObamaCare patients are getting early warnings of increases three times higher than the past two years’ increases thanks to fewer insurers in the market and the end of a federal program that encouraged insurers to artificially hold down rates.
If you live in California and carry ObamaCare, you can expect premiums to rise by an average of 13.2 percent for 2017. Compare this to 4.2 percent and 4 percent increases in 2015 and 2016, respectively, and we can see why customers will be upset. Increases in taxpayer-funded premium subsidies of the over 80 percent who qualify will likely cover the higher premiums next year, but we as taxpayers will be stuck with the bill.
Increases will vary by area with Los Angeles and southwest L.A. County experiencing an average increase of almost 14 percent, for example.
Covered California, the state’s healthcare insurance program, provides insurance to 1.4 million people in California. Officials there are blaming increased medical costs and the end of an important government program that kept rates down during ObamaCare’s first three years. The government assessed a fee on all health insurers and then redistributed the funds among insurance carriers whose members had the highest medical expenses.
At the same time, insurers are right-sizing premium costs now that they have a better understanding of the health of patients attracted to ObamaCare. They originally underestimated costs, so now they are accounting for sicker patients and higher costs for expenses like procedures and prescriptions.
Los Angeles Times reports:
Two of the state’s biggest insurers — Blue Shield of California and Anthem Inc. — asked for the biggest hikes. Blue Shield’s premiums jumped by an average of more than 19%, according to officials, and Anthem’s rates rose by more than 16%.
Mia Campitelli, a Blue Shield spokeswoman, said Tuesday that the insurer’s average 19.9% premium increase was “driven by our members using more healthcare services than we expected,” as well as the phase-out of federal mechanism that had kept rates down in the law’s early years.
Explained Anthem spokesman Darrel Ng: “Factors such as increased use of medical services and added costs of drugs and medical therapies put upward pressure on rates and underscore the additional work that needs to be done to moderate the growth in healthcare costs.”
These price increases mirror what policy experts such as the Kaiser Family Foundation recently predicted for 2017. Premiums for a lowest-cost silver plan are expected to rise by 11 percent and by 10 percent for the second-lowest silver plan. Geographically, the range of increases is wide as a decrease of 14 percent in Providence, Rhode Island to a whopping 26-percent increase in Portland, Oregon.
Double-digit rate increases will be a black eye to a state that has been an ObamaCare darling for the Obama Administration:
California won plaudits by negotiating 4% average rate increases the past two years for its 1.4 million enrollees…
Health policy experts said California is rejoining the pack after keeping rate increases lower than much of the country during the first years of Obamacare.
"This puts a chink in the armor of the California story," said Larry Levitt, a senior vice president at the Kaiser Family Foundation…
If customers think they can just switch health plans to something cheaper, they may find fewer choices, higher costs, and more narrow networks of providers. As we reported, California is one of the states that UnitedHealth, the nation’s largest health insurer, is dropping out of after just one year because of heavy losses nationwide. While United was not a major player, we can expect that those who were are also suffering losses and have an eye on ways to boost their bottom line.
Forget California dreamin’. ObamaCare is increasingly becoming a nightmare for families with limited budgets that are being squeezed by higher healthcare costs.