Covered California health insurance plans for several counties are set to experience their largest-ever rate increase in 2018, with thousands of Humboldt County residents expected to see a 33 percent bump in their premiums, according to Covered California.
At the same time, according to Covered California, federal subsidies provided through the Affordable Care Act used to cover individual insurance costs will also increase for the majority of these local plan holders.
Insurance premiums have risen every year since Covered California — California’s health insurance market under the Affordable Care Act — came online in 2014.
But the 33 percent increase for 22 Northern California counties, including Humboldt County, in 2018 represents the largest-ever increase for all 19 of Covered California’s regions, according to Covered California data.
The average statewide premium increase for 2018 is 12.5 percent, according to Covered California.
UCLA’s Jonathan and Karin Fielding School of Public Health professor and Center for Health Policy Research’s research Director Nadereh Pourat said there are multiple reasons why Northern California rates are so much higher, but said a large part of it has to do with fewer health care providers — such as doctors and hospitals — residing in these rural areas. The fewer providers in the area, the higher the costs to health insurance plans.
“If you’re in Los Angeles and trying to put a network together you have a gazillion hospitals and providers to choose from,” Pourat said Thursday. “If you’re in Humboldt County, maybe you have a community hospital, maybe a couple.”
Covered California Information Officer Jagdip Dhillon said Thursday that he did not have information available on the dollar amounts that next year’s expected rate increases will translate to.
“Regions that show higher average rate increases are difficult areas of the state for carriers to contract with providers,” Dhillon wrote in an email to the Times-Standard. “Usually because lack of provider competition and coordination of care between providers is less common in rural areas than in state’s urban centers. Coordination of care helps to keep costs down.”
Covered California’s 2018 rate report states that average health insurance premiums in Northern California counties are about $500 compared with about $380 in Southern California.
Why pays more?
About 6,300 Humboldt County residents are enrolled in private health insurance plans through Covered California, of whom 90 percent — about 5,700 — receive government subsidies to offset the costs.
But most Humboldt County residents who have received health care coverage through the Affordable Care Act health will not be affected by the rate increases because they are covered under act’s Medi-Cal expansion. The expansion made 1.5 million more Californians eligible for the government health care plan by eliminating age and disability qualifications and basing coverage eligibility solely on income.
Partnership HealthPlan of California, which provides Medi-Cal benefits to Humboldt County, has more than 52,000 county residents enrolled under Medi-Cal, with about 18,400 of those having been enrolled through the Medi-Cal expansion.
“[Partnership] members will not be affected by the premium increases announced by Covered California,” Partnership HealthPlan’s communications specialist Patty Hayes wrote in an email to the Times-Standard. “While many of our members apply for coverage and enroll in Medi-Cal through Covered California, only the private health insurance offered by Covered California is impacted by premium increases. Medi-Cal offers free or low-cost coverage to residents who meet eligibility requirements.”
The rate increases also do not apply to health insurance plans that employers with 50 or more full-time employee equivalents are required under the Affordable Care Act to offer, according to Dhillon.
The ongoing federal debate about Affordable Care Act’s future is also affecting rates, Pourat said, as insurers are unsure whether the federal government will continue to subsidize patients’ plans.
“The worse case scenario from a health plan perspective is they have people they have to cover, but they can’t drop people unless the person doesn’t pay their premium,” Pourat said. “So they are going to be locked into covering somebody and the federal government doesn’t pay the subsidies.”
While all 11 existing insurers under Covered California will continue to provide coverage next year, Anthem Blue Cross is significantly reducing its coverage and will force about 153,000 people insured through Covered California to find a new health plan.
Anthem Blue Cross will continue to cover Humboldt County, but rates are expected to increase between 20 percent to 54 percent, according to Covered California.
Anthem Blue Cross California President Brian Ternan said in an online statement the decision to roll back their coverage was “not an easy decision for us.”
“The market for these plans has become unstable,” Ternan wrote. “And with federal rules and guidance changing, it’s no longer possible for us to offer some of those plans.”
Covered California said the state still has the largest individual insurance market in the nation and has reduced the uninsured rate from about 17 percent at the end of 2013 to 7.1 percent at the end of 2016.
The national uninsured rate decreased from about 14.7 percent to 9 percent during the same time period, according to Covered California.
“More importantly, since California’s individual market has a risk profile far better than the national average, health care costs are nearly 20 percent lower than they otherwise would have been based on the healthier mix of enrollees who have signed up in California compared to the national average,” Covered California’s 2018 rate report states.
More information about the 2018 rate changes can be found on Covered California’s website at www.coveredca.com/news/PDFs/CoveredCA_2018_Plans_and_Rates_8-1-2017.pdf
The Associated Press contributed to this report. Will Houston can be reached at 707-441-0504.