Calif. Health Premiums For Individual Buyers Will Rise
By Jim Sanders, The Sacramento Bee - March 29
Middle-class
Californians counting on the federal health care overhaul to lower their
insurance premiums are in for a double-digit shock next year, a new state
study shows.
People or families who buy insurance for themselves
could see rate increases of up to 30 percent.
Millman consulting
group performed the analysis, but the scope was limited to the individual
market, meaning about 5 million Californians who do not receive insurance
through their employers.
Millions of low-income Californians will
see their costs plummet while costs rise for households where incomes
exceed about $46,000 for an individual or
$94,000 for a family of four, the study concluded.
Comparisons are skewed somewhat by stiffer coverage requirements for next
year's plans, but the bottom line is that the poor are likely to pay
significantly less than they do now while middle-class families dig deeper
into pocketbooks.
"Our top priority is to provide Californians
with affordable health insurance options, and we are pleased that most
individuals will pay lower rates and receive better coverage," said
Peter Lee, director of the state's health care exchange,
which commissioned the study.
Assemblyman Dan
Logue, a Marysville Republican who serves as vice
chairman of the Assembly Health Committee, said the Millman study
discredits vows by health care supporters that premiums would
fall.
"It's a perfect example of a reform measure that in my mind
is falling apart," Logue said. "I don't think it's sustainable. It's going
to be a drag on our economy and standard of living. Health care costs will
rise and the quality will go down."
Under the federal health care
law, nearly all Californians must purchase health insurance or pay a
penalty of $95 or 1 percent of their income, whichever is
higher.
A variety of health plans will be offered next year,
varying in costs and deductibles, but all must cover "essential benefits"
ranging from preventive care to emergency services, lab services,
maternity care, vision care and prescription drugs.
Lee emphasized
that the study is based on estimates and assumptions that can change as
strategies are developed for lowering costs.
Of the 30 percent
increase in premiums for middle-class families next year, about one-third
is due to hikes that would have occurred without the health care law, the
study said.
Even middle-class families whose
premiums rise stand to benefit next year because health care changes limit
out-of-pocket expenses and guarantee coverage even to people with
pre-existing health conditions.
No longer will families risk
bankruptcy because of a catastrophic illness or accident, Lee
said.
"That's a game-changer," he said.
Age, geography and
the type of coverage purchased also can raise or lower rates for a
California
individual or family.
To show how premiums will differ based on
income, the Millman study contained a comparison of costs for a single
individual to buy a basic level of health insurance coverage, the "bronze
plan," with relatively high deductibles.
The lower the income, the
higher the federal subsidy for purchasing insurance, with individuals
having to foot the bill entirely once their annual income exceeds roughly
400 percent of the federal poverty level, about
$46,000.
For the bronze plan, estimated at
$385 per month, individuals would pay nothing if their
annual income was about $17,000; $56 per
month if their income was less than about $23,000; and
$300 per month if their income was about
$46,000.
Patrick Johnston,
president of the California Association of Health Plans, said
that federal health care changes will improve access to health care and
help families avoid financially crippling treatment costs -- but not
necessarily for free.
"A small percentage of Californians will
purchase their insurance through the exchange, and most will have the
benefit of more predictable and comprehensive coverage, as well as
subsidies to help pay for that coverage," Johnston said in a prepared
statement. "But this report shows that lower cost sharing, richer benefits
and more predictable coverage will come at a cost for some."
Call
Jim Sanders, Bee Capitol Bureau, (916)
326-5538.
(c)2013 The Sacramento Bee (Sacramento,
Calif.)