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Open Enrollment, Federal Turmoil Raise Many Questions for Health Care Consumers

Guest Blogger 10/17/2017
Guest Blogger

The 2018 renewals for Covered California health plans have been announced and open enrollment for the exchanges begins November 1.  Consumers have lots of questions about their coverage and costs for next year. Compounding the concerns of health insurance buyers, during the past week, the White House issued an Executive Order to allow purchasing health insurance across state lines, expand coverage through short-term limited duration insurance and make regulatory changes to Health Reimbursement Arrangements (HRAs). In addition, the Administration announced that it would be terminating the Cost Sharing Reduction (CSR) subsidies for low-income insureds.

Following the actions by the Administration, Covered California announced that their members will not see any change in their health costs for the remainder of 2017 and the rates and out-of-pocket costs published by Covered California for 2018 will not be affected.

To assist health care consumers in understanding how all this activity will affect their costs and coverage for 2018, we have prepared answers to some of the most common questions that we are hearing from our customers.

What are cost-sharing subsidies and how are they different from premium tax credits?

Two types of subsidies are available through Covered California. Premium tax credits reduce an individual’s monthly premiums while cost-sharing subsidies reduce the amount of out-of-pocket costs, such as co-pays, co-insurance and deductibles.  Individuals and families who are eligible for premium tax credits and whose household income is between 138 percent and 250 percent of the federal poverty level may receive cost-sharing subsidies if they enroll in a Silver level plan.

Will premium tax credits still be available to eligible individuals and families buying coverage through Covered California?

Yes.

Will the cost of Silver level plans offered through Covered California increase in 2018 because of the Administration’s action?

Covered California instructed insurers to add an average 12.4% surcharge (range varies by insurer from 8% to 27%) to Silver level plans for 2018 due to the Administration’s lack of commitment to continue funding the subsidies and in anticipation that the Administration would cease funding.  But the surcharge will largely be offset by an increase in premium tax credits, which is pegged to the cost of coverage.

Covered California estimates that 78% of subsidized consumers will see no change in what they pay in 2018 or will pay less than if there had been no surcharge.  The remaining 22%, however, will see increases but about half will see increases of less than $25 per month.

Will the cost of 2017 Silver level plans offered through Covered California change because of the Administration’s actions?

The cost should not change.  The insurers participating for the 2017 plan year are bound by contract with Covered California.

Is California taking any other steps to minimize the impact?

Yes.  California, along with 17 other states and the District of Columbia, have filed suit to keep the Administration from stopping the subsidy payments.  The complaint seeks a temporary restraining order, preliminary injunction and permanent injunction requiring the cost-sharing reduction payments be made.

KeenanDirect is actively working with our customers to help them work through these changes and is answering their questions as Open Enrollment approaches.  If you have questions about the choices available to you and the costs you can expect for 2018 individual and family health plans, contact us at 855-653-3626.

 

 

 

sam_blog_bioAbout Sam Cole
Sam Cole serves as Vice President of KeenanDirect. He has more than two decades of experience in the California insurance market. He is a Lifetime qualified member of the National Association of Health Underwriter’s (NAHU) Leading Producers Round Table. For free assistance, please contact us at KeenanDirect: www.keenandirect.com or 855-653-3626.