California health insurance - California health insurance rate increases

Health Insurance Rates Are Going Up. What To Do?

Get Updated Guide to Open Enrollment Including Changes, Rates, Benefits, and a Plan of Attack HERE

We're getting panicked calls and emails.

"My rates are going up 38%. I can't afford this!"

Worst yet...

"My rates are going from $1 to $350 a month. That's with the tax credit!"

Either way, the warnings we've been giving since 2014 are becoming reality.

Unfortunately.

So...what's causing the increases? What can we do? Please help!!!

Let's take a collective breath and approach this open enrollment like a trained assassin.

What can we do to offset the 2017 health insurance rate increases!

RATE UPDATE: You can quote current rates here at 800-320-6269 or by email. The quote links below will show 1/1/17 rates starting Nov 1st when Open Enrollment starts.

First, why are they so big?

What's driving the 2017 Health insurance rate increases

ome of the increase is due to the structure of the new ACA health market (started in 2014) but 2017 has some additional piling on.

The 3 "R's"

Written into the original ACA (Affordable Care Act) law (aka Obamacare), was a set of temporary mechanisms created to ease the transition to the new market.

Take a guess as to when they're ending.

Correct! 12/31/2016.

The most important one was call Re-insurance. This basically allowed the Federal government to reimburse carriers for high claims (poor health) new members.

The theory was that with guaranteed issue coverage (can't be declined due to health), you would have a lot of new members with large health care costs.

Reimburse the carriers for this onset to the tune of a few billion during roll-out of the new market to stabilize pricing.

The goal was to get young, healthy people to join for better long term pricing.

That didn't really happen and more importantly, the costs associated with today's big health care issues (think Hep-C, diabetes, hip replacements, etc) are through the roof. 10's of

$1000's per year.

The new 2017 rates no longer have this "support".

We're feeling the difference.

Gaming the System

People will always behave according to their best interests.

If a person finds out they need a hip replacement (not an immediate emergency), what's to stop them from waiting till open enrollment, getting the surgery, and then dropping the

plan?

Ummm..absolutely nothing.

This is called Adverse Selection and it's the absolute death sentence for any type of insurance.

The penalty was suppose to offset this calculation but for some people, it's a question of pay $200/month in penalty versus $100K for surgery and then $600 in premium.

Ooops.

Our calculation is that the penalty would have to be 9.5% of income to really put pressure on the market and offset adverse selection.

It's not. It's 2.5%.

Young Invincibles

Finally, the healthy are not enrolling in the numbers required to make the market healthy.

California is tricky in that the income levels needed to get a tax credit are based on a Federal number.

Guess what...it costs twice the amount to live in California and therefore, people make a lot more in California.

And don't qualify for a tax credit.

We especially see this for younger people where their income has to go really low to get a tax credit.

$40K in Los Angeles is very different than $40K in Indiana.

Forget about SF and the bay area. $40K is poverty up there!

The Tax Credit dagger

We're also seeing something else in the mix. By law, a carrier must charge at least $1/person if their plan is less than the tax credit.

We have calls where the premium has gone from $1/month to $250/month!

Again, they were under the limit and the baseline plan increased by $250.

Ouch.

Okay...enough of the reasons for the increase.

What can we do to stop the bleeding?

Open Enrollment options to offset rate increase

There are a few options to look at in this order

Re-evaluate income estimate for tax credit eligibility
Shop the full market
Consider downgrades to less-rich plans
Consider move to HMO or EPO plans
Consider move to smaller, regional carriers

Let's discuss each of these.

1. Re-visit income estimate

We've said it often at www.calhealth.net

Income drives everything now!

Don't assume you make too much. Especially for self-employed people.

Tax credits can swing rates significantly and tax credits are mainly driven by Adjusted Gross Income and size of Household.

What are these?

First, we can help you with the income calculation since most people that do this themselves get incorrect results and may miss out on tax credits.

Most people we speak with have an incorrect calculation that's preventing them for getting the tax credit.

It's complicated!

Call us at 800-320-6269 or run your free instant quote here.

We can size up your income and tax credit in 5 minutes! Our services are free to you as Certified Covered Ca agents.

Back to income/household.

Income. We want to estimate your line 37 on the 1040 tax form for 2017 (April 2018 filing).

Household. Everyone that files together on one 1040 tax form.

There are lots of twists and turns with this calculation so let us help!

Call 800-320-6269 or run your instant quote here.

2. Shop the full market

We're seeing huge changes each Open Enrollment.

Carriers enter areas. Carriers leave areas.

Plans networks change. Plans go up. Believe it or not, some plans even go down.

PPO's get turned into EPO's. You get it.

So the key take away is that you have to quote the market each year.

There's no staying on the same plan for years anymore.

You can quickly quote your Covered California options (with tax credits) and off-exchange plans here.

A few quick notes to guide you.

Focus on the Bronze and Silver plan.

Yes, they have higher deductibles but you'll notice that the premium difference can offset the difference in deductible. This will only become more true with time.

Network differences matter.

There are significant differences now in the doctors/hospitals you're able to see.

It's doesn't help to save on premium if you can't use the hospital in your area.

On and Off Exchange Plans

By law, Covered Ca and off-exchange versions of the same plan have to have the same rates, network, and benefits.

Check out our up-to-date guide on the new California networks.

You can only get a tax credit (if eligible) on Exchange.

You can quote both markets here with the tax credit already built in.

3. When downgrading makes sense

Here's the deal.

There are 4 main levels of coverage now...Bronze, Silver, Gold, and Platinum.

Since coverage is guaranteed issue now (offered regardless of health), the pricing difference as you go up the scale basically outweighs the benefit difference.

This is especially true as you get older (say 40-65).

This makes complete sense.

If a person has a surgery coming up, they will take the Platinum plan if it saves them money.

Eventually, the platinum plan rates will spiral up as a result and cost the difference in benefit.

No incentive to go up for existing medical expenses.

Take a look at the Bronze or Silver for that reason.

The Silver is by far the most popular plan on the market.

If you're offered one of the enhanced Silver plans (based on income), that's a slam dunk. Especially the Silver 87 and 94.

In 5 minutes, we can quickly size up tax credits and compare the plans at 800-320-6269 or quote here.

4. Move to HMO or EPO plans

The health insurance world is changing.

Some carriers are going to EPO from PPO.

Eventually, we're all heading to HMO.

That's just the way it is. There is such a push to contain health care costs that any management of care will succeed.

HMO is management of care at its finest (or worst depending on your view).

We're all heading there with the current setup.

You can read more about PPO versus EPO here.

Information on the new network changes here.

If the move to HMO or PPO will save you money, we may need to make that move sooner rather than later.

Unfortunately, it's fighting the tide not to.

Quote the HMO and EPO plans along side PPO here.

5. Move to smaller, Regional carriers

We've all heard of the Blue's and Kaiser.

What about Molina? or Sharp?

There are smaller, less-known carriers in certain areas that we may need to consider.

Scripps and Sharp are down south (San Diego). Molina and LA Care are in the greater Las Angeles area.

San Francisco has Sutter and Chinese health plan.

In many quotes we run, Molina is the least expensive plan on the market.

As we face significant pricing headwind, we may need to consider these carriers more closely.

What does that mean?

First, many of their plans are HMOs. You will have a smaller network in many cases.

The San Diego based carriers actually have very strong doctor/hospital networks. In fact, most people know the facilities/doctors and not the insurance.

In Los Angeles, Molina and LA Care were traditionally low cost, Medi-cal insurers. It will feel a bit different but it may be the only affordable option.

Here's the deal...we can change plans at the end of each year anyway. You can even switch for Jan 1st and still request a change by end of January for 2/1 eff date. This way,

we can test how we like them.

You can quote all the carriers including these regional players here.

2017 Rate Increase Action Plan

California health insurance rates It all starts with a quote.

Seriously.

You can either instantly run yours here or call us at 800-320-6269.

Our services are 100% free to you as Certified Covered Ca agents.

We'll help you nail down the income piece and tax credit. We'll then look at the plans and save you quite a bit of time with this analysis.

We can enroll you by phone in 5 minutes!