Covered medical insurance in California will increase an average of 5.2% in Sonoma County; 6% statewide

Insurance premiums in the state’s California Covered Health Exchange are expected to rise an average of 5.2% in Sonoma County and 6% statewide.

The increases, announced Tuesday, are partly due to a return to pre-pandemic health care utilization and the potential expiration of federal assistance from the American Rescue Plan Act, which expires in December, said Covered California executive director Jessica Altman.

During the pandemic, the federal government has beefed up subsidies for those who purchased insurance in the individual market through Covered California. Altman said if the American Rescue Plan Act is allowed to expire, 1 million low-income residents could see their premiums double and 220,000 middle-income residents could end up dropping their coverage.

“This is, of course, against the backdrop of high inflation of other economic factors that are driving up the costs of other household necessities like food, like gas, at a time when we know California families are already faced with tough decisions about the kitchen table,” Altman said. during a conference call on Tuesday.

The projected rate increases vary across the 19 California regions covered. Sonoma, Marin, Napa, and Solano comprise Region 2, with a current membership of 59,780 health exchange consumers.

Covered California, the state’s health benefits exchange under the Affordable Care Act, offers discounts that allow eligible consumers to purchase private label insurance.

Altman said the 6% statewide average increase is lower than the 10% national average among the 13 states and the District of Columbia, which have so far filed their rates. This is the largest increase since the start of the pandemic in 2020.

The years 2020, 2021, 2022 saw rate changes of 0.8%, 0.5% and 1.8%, respectively. The four-year average change between 2020 and 2023 is 2.3%.

Altman called the expected increase in the health exchange “moderate” and the result of several factors, including aggressive negotiations with carriers. She added that the state is also home to one of the healthiest pools of residents in the country, while the record number of registrations in 2022 brought the number of covered California consumers to 1.7 million.

But Altman said health care utilization and costs are returning to pre-pandemic levels. Two-thirds of the projected increase in statewide rates, or about 4%, is due to higher utilization as people seek medical treatments again that, in some cases, have been postponed for the pandemic.

Altman said the expiration of subsidies under the American Rescue Plan Act would have a significant impact on what consumers actually pay in premiums. Under the Affordable Care Act, premiums have been capped at 8.5% for people with incomes below 400% of the federal poverty level who purchase insurance through an exchange.

The American Rescue Plan Act eliminated this threshold, capping premiums for anyone who purchases health plans through an exchange at 8.5%. The increases people would see if the grants expired depended on their income level, said Anthony Wright, executive director of Health Access, a statewide health care consumer advocacy group.

For example, in US Congressman Mike Thompson’s 5th District, 28,734 people who purchased health plans through Covered California are receiving grants under the American Rescue Plan Act. Their average monthly premium is $126, but eliminating the subsidies would increase that monthly payment to $241.

In US Congressman Jared Huffman’s 2nd District, 33,400 covered California enrollees receive covered California grants through the American Rescue Plan Act. Their average monthly premium is $123, and eliminating assistance would increase it to $256.

Without the Affordable Care Act subsidies, the average monthly premiums for residents of the 5th and 2nd Districts are about $700 and $717, respectively, Wright said.

On average, for those whose incomes are four times the federal poverty level — and receive no subsidies under the Affordable Care Act — the loss of American Rescue Plan Act assistance for residents of North Bay buying plans through Covered California means a financial hit of more than $4,000 a year, Wright said.

“It’s real money,” he said. “If you’re over 400% of the poverty line, you’re making $50,000 (per year) for an individual, over $111,000 for a family of four – but still, $4,000 is real money.”

The American Rescue Plan Act ensures that households pay no more than 8.5% of their household income on their health plan premiums if they enroll through an Affordable Care Act marketplace.

American Rescue Plan Act grants in California total $1.7 billion. Altman said if the grants aren’t extended, the state will try to make up for some of the losses using a $304 million fund the governor and lawmakers allocated in the last budget.

“It would only be a fifth of what we had,” Wright said. “We really want Congressional money to be (extended). And then it allows us to use accessibility funds (from the state) to provide better cost-sharing assistance, to eliminate deductibles, things like that.

A plan to expand American Rescue Plan Act grants is currently the subject of an economic plan being debated in Congress that would limit pharmaceutical prices. Wright said the cost of expanding subsidies would be paid for by savings in drug prices.

“We expect a vote in the next week or two – our hope is by the end of July or the first week of August, but it’s likely to be a party vote,” he said. declared.

You can reach editor Martin Espinoza at 707-521-5213 or martin.espinoz[email protected] On Twitter @pressreno.

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