Budgeting for healthcare coverage just became more expensive for many Americans.
The average individual premium in 2014 may rise 27% states Bob Cosway, a principal and consulting actuary at Milliman Inc. here in San Diego, according to BusinessInsider information which cites the LA Times. Cosway's estimate factors in the addition of sicker patients as a result of guaranteed coverage, and also states it is the biggest single reason for higher premiums.
As thousands of Californians receive cancellation notices from healthcare providers they wanted to keep and the discovery of undesired health plan exchange packages found at the CoveredCalifornia website, the reaction is dismay.
As the ObamaCare overhaul attempts to remake the healthcare market and cover millions who have been shut-out for years, the complaints about increased policy costs as reported in the Examiner, and glitches in the system, also told here, are important.
But as the KaiserFamilyFoundation online states the issue, recent practices "... can lead to less healthy people being disproportionately concentrated in certain policies, and the high premium increases they face can cause people to give up coverage. Ending these practices will tend to lower premiums for some current nongroup enrollees with health problems and will increase them for enrollees who are healthy."
Covered California: "We are ... making it better"
"Many plan cancellations were required by Covered California," according to the website Californiahealthline.org, to guarantee that insurers would not keep the healthiest individuals out of the state insurance exchange. Quoted in the article is the executive director of Covered California, Peter Lee, on the need for healthy individuals to enter risk pool:
"People could have kept their cheaper, bad coverage, and those people wouldn't have been part of the common risk pool. ... We are better off all being in this together. We are transforming the individual market and making it better."
The plan cancellations thus far are:
- 119,000 policyholders at Blue Shield of California
- 160,000 policyholders from Kaiser Permanente
The website reports those who are being cancelled do not meet the ObamaCare law's minimum coverage levels, and they must now find something that complies with it, even though about two-thirds of Blue Shield policyholders "... will likely pay higher premiums for a new plan."
Choosing to go without coverage, because of the higher cost, and opting to pay the tax penalty could cause rates to skyrocket according to a piece in the LATimes by Chad Terhune, if the right mix of people (healthy and sick) don't sign up for the health insurance. Quoted by the Times is the president of Anthem Blue Cross in California, Pam Kehaly, who said she received a letter from a young woman complaining about a 50% rate hike which was related to the healthcare law:
"She said, 'I was all for Obamacare until I found out I was paying for it.'"
Most Americans are required to have health coverage starting next year or pay a fine of $95 per adult or 1% of their income, whichever is greater, according to the Times story.
And those monetary penalties will increase over time.