DOI Says 2014 Premiums Skyrocketed
A new analysis by the California Department of Insurance concluded that many state residents paid far steeper premiums for individual healthcare policies this year than they had in the past.
According to the analysis, premiums increased an average of 22% to 88%, depending on geographic location and age.
In Los Angeles, an insured individual in 2013 who purchased coverage this year with the same insurer experienced an average increase of 34.9% to 51.9% if they purchased benefits at the “silver” level. For a “bronze” level of coverage, the rate increase was 15.9%
to 30.3% on average.
The increases were even higher in Fresno County in the San Joaquin Valley, where a silver-level plan increased 66.8% to 87.8% on average, depending on age.
“For those whose incomes were low enough, there were premium subsidies under the Affordable Care Act. But for Californians whose incomes were not low enough, there was likely a major rate increase,” said state Insurance Commissioner Dave Jones.
According to data from the Covered California health insurance exchange, about 88% of the 1.4 million residents who purchased individual coverage during the open enrollment period that ended March 31 were eligible for some sort of tax subsidy based on their income. A total of 173,609 were not eligible for subsidies.
Of those with subsidies, 66.2% chose a silver level plan, while 24.3% picked a bronze plan. Among those who lacked subsidies, 35.6% picked a bronze plan, while less than 30% picked silver.
However, 27% of those without subsidies picked pricier gold and platinum plans, more than triple the rate of those with subsidies – suggesting that price was less of an object for those who had higher incomes.
The three-page analysis by the DOI, which included two pages of charts, was focused on the state's largest health plans, Anthem Blue Cross of California, Health Net, Blue Shield of California and Kaiser Foundation Health Plan. It did not include smaller carriers, including several county-operated health plans that only began offering commercial coverage as a result of the Affordable Care Act.
The DOI analysis comes about three months before Californians are poised to vote on whether the agency should have the authority to regulate premium increases. Proposition 45, which was sponsored by the Santa Monica-based advocacy group Consumer Watchdog, will appear on the November ballot, and Jones has said he supports the measure. The insurance sector is expected to spend tens of millions of dollars to
The analysis and its methodology was slammed by the California Association of Health Plans, the state's major lobby for health insurers.
“(Jones') analysis doesn’t take into account subsidies, enrollees who are benefitting from the ACA or acknowledge how the ACA has substantially expanded coverage and benefits while also changing the way premiums are priced,” said CAHP Executive Vice President Charles Bacchi. He added that the DOI has regulatory authority over health plans with about 5% of Covered California's total enrollment.
“The ACA (opened) up access to comprehensive healthcare to millions who previously could not obtain or...afford it. And, while some paid more for this expanded coverage, many Californians paid less and benefited from subsidies,” Bacchi said.
