California is expected to weather federal changes to health insurance rules better than many other states, but it will still face declining enrollment and rising premiums, two new studies predict.
A Harvard-led survey of Californians who buy health insurance on the individual marketplace found that one in five would likely drop their coverage once they no longer face a tax penalty for being uninsured.
The penalty, also known as the “individual mandate,” will disappear in 2019 as part of changes in the tax bill adopted by Congress late last year. That could result in almost 400,000 people who currently purchase health insurance on their own forgoing insurance, the study found. That includes people who buy health insurance on the state exchange, Covered California.
“Obviously, that’s moving in the wrong direction,” said lead study author John Hsu, an associate professor of health care policy at Harvard Medical School. “We’d ideally like to see more people insured and have the financial protection of having health insurance.”
The decline in the number of people insured will likely lead to premium increases, both in California and across the nation, another study released by Covered California last week predicted. That’s largely because healthier people will be more inclined to drop their insurance if they don’t face a penalty, while sicker people would stay enrolled, experts said. Some states could see as much as a 90 percent increase in premiums between 2019 and 2021, the analysis indicated.
California is expected to do a better job of reigning in insurance price increases, the study estimated, but the cumulative premium hikes could still be around 35 percent above current rates. Covered California Executive Director Peter Lee predicted premiums could rise by 12 to 16 percent in 2019 alone.
“Increases at this level are bad news for consumers,” he said in a statement. “But Californians would be in better shape than most of the nation would be.”
People likely to be most affected by the rate increases are those in the middle-class who earn too much to qualify for health insurance subsidies that help mitigate rising costs. Those consumers number about 800,000 people across the state, said Covered California spokesperson James Scullary.
Other factors could lead to further destabilization of the health insurance market nationwide, Hsu said. These include proposals by the Trump administration to allow the sale of cheaper plans that offer skimpier insurance than currently permitted under President Obama’s Affordable Care Act.
“One of the basic …read more
Source:: The Mercury News – Health