All the talk about killing the Affordable Care Act this year apparently has not sent Californians running from Covered California, the state’s health insurance exchange.
According to an update released Wednesday, more than 102,000 Californians signed up for Covered California policies in November, a 28 percent increase over last year.
While some analysts have said they expect exchanges operated by the federal government in other states to see enrollment decrease by about 20 percent, California seems to be bucking that trend.
Peter Lee, Covered California’s executive director, said Wednesday afternoon that his organization has seen no sudden move toward the exits as Congress seriously considers repealing the individual mandate, the act’s signature requirement that most Americans buy insurance or pay a penalty assessed on the following year’s tax return.
“Washington is politics, but health is personal,” Lee said. “If people see that they can get health insurance next year and they can afford it, they’re stepping up.”
Craig Gussin, a local insurance agent and past president of the San Diego Association of Health Underwriters, said the phone at his office started ringing on Nov. 1 and kept going full pace for weeks. He said it’s not clear exactly whether it’s premium anxiety or fear of missing out surrounding potential ACA changes that’s driving the early interest.
“Every agent I know across San Diego County has said to me, ‘it’s crazy,’” Gussin said.
This year is made a little strange by President Donald Trump’s decision to eliminate cost-sharing payments to health insurance companies, forcing Covered California to put a surcharge on silver-level plans. But, because 85 percent of the exchange’s 1.2 million enrollees receive subsidies from the federal government to help pay their premiums, and those subsidies increase as the price of plans increase, the effective cost increase has been minimal at most.
For the 102,000 new Covered California customers who have selected plans for the first time this year, plus nearly 400,000 existing customers who have proactively chosen new plans for 2018, covered California calculated that average monthly premiums for a bronze plan have dropped from $87 to $45 while silver plans have stayed nearly the same and the cost of gold premiums fell from $290 to $212.
This counterintuitive result, Lee explained, occurred because exchange subsidies are calculated based on the cost of the second-cheapest silver plan in the exchange, and surcharges increased that cost due to the president’s decision not to renew cost-sharing subsidies to insurers.
“The subsidies went up year-to-year more than the premiums did,” Lee said.
But that’s only been the story for the million or so Californians who make little enough to qualify for subsidies from Uncle Sam. The picture is much pricier for those who make enough that they get no extra help.
According to Covered California, the average unsubsidized premium for a silver plan among those who enrolled or renewed in November increased from $446 per month to $494 per month. The average monthly cost of a gold plan, which pays a larger percentage of total health care expenses, increased from $491 to $546.
Gussin, the San Diego insurance agent, said that he routinely advises the unsubsidized to look beyond Covered California.
“If they’re not getting a subsidy, Covered California does nothing for them. They have more options outside the exchange,” Gussin said.
While some might think that the plan to kill the individual mandate might somehow render all of the current enrollments moot, Lee said that’s not the case.
“The proposal in the Republican tax bill to halt the mandate stops it after 2018. There is no proposal that would say the penalty is going away for 2018,” Lee said.
Covered California’s open enrollment period runs through Jan. 31 though policy selections must be made by Dec. 15 in order for newly selected plans to take effect on Jan. 1. By comparison, federal exchanges have decided to end their open enrollment periods on Dec. 15, eliminating the final six weeks that Californians will enjoy.
In California, those who select a new plan in 2017 still have all of January to change plans if they decide they’ve found a better option. The 800,000 or so Californians currently enrolled in Covered California plans who have not yet re-enrolled for 2018 will automatically be re-enrolled in their current plans if they take no action by Dec. 15.