Thousands in San Diego could see health care premium increases in 2023 - freetxp

Thousands in San Diego could see health care premium increases in 2023

More than 100,000 San Diego County residents on Covered California health insurance plans should get ready for sticker shock in 2023.

That was the message delivered Wednesday by Peter Lee, outgoing executive director of the health care exchange that has enrolled nearly 1.8 million Californians for coverage in 2022, the second year of a two-year $22 billion increase in subsidy payments that were part of the 2021 American Recovery Act. Most of them — about 1.6 million — across the state qualifying for subsidy payments to help them afford, essentially having the taxpayer fill in where private companies generally underwrite a significant portion of the bill for their employees.

The increased subsides were said to have reduced monthly premiums by $180 on average for those already or newly enrolled in plans sold by the exchange. The change has dropped costs near zero for those living near the poverty line and also significantly extending financial assistance to those earning between 200 percent and 400 percent of the federal poverty rate — $52,400 to $104,800 for a family of four. The Recovery Act subsides also cap individuals’ and families’ maximum health premium expenses at 8.5 percent of income, providing some help even to those who earn above the previous 400 percent limit.

Lee, who announced last year that he will leave the organization he helped build from the ground up, said that if subsides are allowed to sunset at the end of the year, many will decide not to renew in 2023. Such a departure, he said , could have an effect on overall premiums.

“The people that drop coverage first are the healthy,” Lee said, noting fewer that young and healthy enrollees means less revenue to pay claims, a situation in which “premiums will rise.”

“If the American Recovery Plan subsidies are not continued, we are very likely to see a premium spike irregardless of the tax subsidies not just in California, but across the nation,” Lee said.

It is a little unclear exactly how many San Diego County residents will be affected.

The state agency’s most recent enrollment snapshot with county-level data was published in September, before the open enrollment period for 2022 coverage started. In September, though, Covered California listed 107,300 San Diego County residents as receiving subsidies, a 19 percent increase over the 90,260 said to be receiving subsidies in December 2020.

Though the evaporation of Recovery Act cash at the end of the year would immediately change rates for millions, they would still receive federal subsidies, meaning that many would return to rates they might have been familiar with in the first year of the COVID-19 .

For example, a 40-year-old San Diego County resident making $25,000 per year would currently pay $60 per month for a silver plan from Health Net, receiving $337 per month in federal and state subsidies. That same hypothetical resident paid $119 per month for the same coverage in 2020, before the Recovery Act subsides took effect, according to Covered California’s “Shop and Compare” tool.

A San Diego County family of four, with parents in their 40s and two kids ages 15 and 8, currently pay $413 for a silver Health Net plan but paid $507 per month for the same plan in 2020. The amount of monthly federal subsidy that the family received increased from $719 per month in 2020 to $948 per month in 2022.

Cynthia Cox, director of the Affordable Care Act program at Kaiser Family Foundation, a nonprofit and nonpartisan health care think tank, said it was difficult to think of a time when so many might suddenly receive significant price increases at the same time. The situation is made even more difficult because the Recovery Act also expanded funding and eligibility for Medicaid, the health plan of last resort for disadvantaged Americans.

She said there is plenty of desire in Washington to continue the subsides. They are included in the massive and currently stalled “Build Back Better” spending plan that could still get passed this year. Extending the subsides is clearly a high priority, given that they were mentioned by President Joe Biden toward the end of Tuesday’s State of the Union speech.

With the midterm elections now on the near horizon, many on the hill, she said, understand the potential political ramifications.

“If the subsidies are allowed to expire, then enrollees will start hearing about premium increases from their plans and in the media in October, right before the midterm elections,” Cox said.

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