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Rate increases on the horizon in Covered CA as mandate disappears

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If you are one of the nearly 1.4 million Californians currently on a Covered California plan, or if you’re newly self employed and faced with choosing coverage on the individual market for the first time, it is time to take a look at your options for 2019.

As always seems to be the case, rates are going up next year. The state’s health insurance exchange announced this summer that the average premium increase for its customers in 2019 will be 8.7 percent.

But that’s just an average.

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The actual change ranges from a decrease of 8 percent to an increase of 32 percent, depending on the specific plan and rates involved.

For Adam McLane of Rolando, the increase is near the middle of the range.

“We just got a notice from Kaiser in the mail that says our rates are increasing 15 percent next year,” McLane said.

The family enrolled in a Covered California plan over the summer after McLane’s wife lost her job.

The increase, he said, has gotten him thinking more seriously about seeking care in Mexico. He said he’s had good experiences in Mexican hospitals in the past, and next year there is no penalty for going without health-care coverage due to changes made in 2017 by the Trump administration.

“We’re a creative family, so we’re certainly not afraid to cross the border. It would be something we would definitely consider. At this point, we’re not sure what we’re going to do,” McLane said.

While the rate increases are unwelcome, many, including the McLane family, receive help paying their premiums from the federal government.

The Trump administration’s decision to do away with the Affordable Care Act’s requirement to buy insurance or pay a penalty was predicted to cause a large spike in monthly rates, but that hasn’t happened, according to the nonprofit Kaiser Family Foundation. While states such as Vermont and Georgia have seen double-digit percentage premium increases, most states have seen price hikes in the single digits and some have even seen decreases.

“The reason, perhaps, that you’re not seeing an enormous increase is because the individual mandate was not that severe a penalty in the first place,” said Kristof Stremikis, director of market analysis with the nonprofit California Health Care Foundation. “The premium subsidies seem like they have been the biggest key factor in getting people to enroll.”

With a little shopping around, Covered California notes, it’s possible to find a plan that comes close to holding prices steady.

To help you do that we’ve built a full-page list that shows how premiums have changed across the five different carriers that sell plans through Covered California in San Diego County. We chose three of the most-common scenarios — an individual in their 20s, a couple nearing Medicare eligibility age and a family with young kids — to help you see at a glance how your rates might change from plan to plan and at different income levels with subsidies applied.

However, for those solidly in the middle class, premiums can still add up to hundreds per month, and standard deductibles are still often several thousand dollars.

While much cheaper deductibles and copays are available to those with low enough incomes to qualify, people like McLane say they still feel they’re buying coverage that they don’t feel they can really afford to use.

“It just starts to feel like a racket you can’t escape,” McLane said. “You try not to be cynical, but that can be difficult.”

Three important points

If you’re in a Covered California plan or know you will be shopping for one this fall, there are a few important items it pays to understand:

  • Your children can end up in Medi-Cal, the state’s program for disadvantaged residents, even if your household makes more than $50,000 per year. Using a family of four as an example, Covered California offers plans for households with a combined annual income of $34,638 or more. Any less than that and the entire family will automatically be directed to enroll in Medi-Cal. But the state offers Medi-Cal enrollment for children age 18 and younger who live in households making up to 266 percent of the federal poverty level. That’s equal to $66,766 in combined annual income for a family of four. So if you make less than that amount and try to enroll through Covered California’s website, your kids will most likely be automatically enrolled in Medi-Cal. That’s exactly what happened to the McLane family when they enrolled in mid-2018.

“(Our children) were assigned a case worker and everything, and that’s not what we wanted to happen. It actually took a lot of effort to get that changed,” McLane said.

It is possible to enroll children in the same plans as their parents even if the family’s income qualifies them for free Medi-Cal coverage. However, if you take that step, a Covered California representative confirmed, you will need to pay full price for the portion of your monthly premium that covers your kids. The government does not subsidize the premiums of anyone who qualifies for Medi-Cal. If you do want to enroll in a Covered California plan and you don’t want your kids enrolled in Medi-Cal, it’s best to call Covered California’s enrollment hotline at (800) 300-1506. The enrollment workers who answer the line are well versed in handling this specific situation.

  • If you are receiving a subsidy payment from Covered California that reduces the amount of your monthly premium payments, Covered California asks you what you think your income will be in the coming year, and also takes a look at your previous tax returns to determine if that amount is reasonable. It’s completely up to you to monitor your income and let Covered California know if your best guess is turning out to be wrong. If you made more than expected in a year, then the IRS will find that you received more financial help than you should have and you will likely have to pay a portion of that back on your return. So, it’s important to track your income as the year continues and report any changes to Covered California.
  • Preventive services aren’t subject to your deductible. This means you don’t pay extra for screening services, vaccinations, and well-baby or well-child visits. Annual physical examinations for adults, however, are not covered. Health insurance companies and medical providers have, however, been known to get this wrong during the billing process. If you have received a service that you believe was preventive, rather than responding to a specific medical complaint, you can check out the official list maintained by the U.S. Centers for Medicare and Medicaid Services at bit.ly/ACAcovered.

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paul.sisson@sduniontribune.com

(619) 293-1850

Twitter: @paulsisson

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