IBJNews

WellPoint among 13 picked to join California exchange

Back to TopCommentsE-mailPrintBookmark and Share

California residents who choose to buy health insurance through the state exchange being created by the Affordable Care Act may end up paying higher premiums.

Indianapolis-based WellPoint Inc., Molina Healthcare Inc. and Health Net Inc. were among 13 insurers selected to participate in the most-populous U.S. state’s health exchange, which begins enrollment Oct. 1. While the rates the companies will charge vary widely depending on a person’s circumstance, the director of the exchange said Thursday that premium increases will be less than the 30-percent jump projected by consulting company Milliman Inc.

“There have been predictions across the board that rates were going to skyrocket,” Peter Lee, the executive director in charge of the Covered California health exchange, said in a conference call. “Rates are going up at far lower than the best estimate Milliman thought might happen and way below the worst estimates of doom and gloom.”

Aetna Inc. has warned of “rate shock” when customers shop for plans in exchanges, citing health-law policies that mandate better benefits and prohibit the companies from refusing to cover the sick or charging older people more than three times as much as young adults. Aetna, along with UnitedHealth Group Inc. and Cigna Corp., three of the four-largest U.S. health insurers, chose not to join the California exchange.

People who currently buy coverage for themselves or their families from Blue Shield of California, a not-for-profit that is one of the largest insurers in the state, will see average rate increases of about 13 percent when they renew their coverage in the exchange, Paul Markovich, the company’s president, said on the call. Federal subsidies can greatly reduce the cost.

About 5.3 million Californians will be eligible to purchase coverage through the new exchange and about half may be eligible for the subsidies, according to the report.

Lee said individuals can expect to pay as much as 29 percent less than what small businesses now pay for coverage, though that estimate doesn’t provide a direct comparison to today’s costs to individuals. Some people, especially low-income residents, should expect to see their costs fall.

“We think the premiums you’re going to see are competitive,” Lee said.

In Los Angeles County, rates will be as low as $117 a month, before federal subsidies, for a 25-year-old buying a high-deductible plan intended to cover only “catastrophic” health costs, according to a report by Covered California.

President Barack Obama’s 2010 health-care system overhaul called for the implementation next year of health-insurance marketplaces in every state to sell coverage to people who don’t get it at work, often with government subsidies to reduce the cost. The health law will also expand some state Medicaid programs, which provide insurance for people living in or near poverty.

Milliman, the Seattle-based consulting company, said in March that Californians who make too much money to qualify for subsidies may pay as much as 30 percent more for insurance as a result of the law.

Lee said Covered California hasn’t yet conducted an apples-to-apples study of how exchange rates for individuals will compare to current rates available to individuals. He used a comparison to rates in the small business market because California law prohibits insurers from refusing coverage to people employed at small firms, just as the federal law will require for individuals starting next year.

For the Blue Shield plans, a 40-year-old in north Los Angeles, earning less than $17,000 a year who buys individual coverage would pay $57 a month after subsidies, according to the report. Without subsidies, the plan would cost $252 a month.

The plan would cover about 70 percent of her medical costs, a level of coverage the law calls “silver.” Bronze-level coverage that pays 60 percent of costs, the minimum allowed under the law, would cost an average of $1 a month for the same 40-year-old, after subsidies.
 

ADVERTISEMENT

  • Premium Increase Hullabaloo
    The fear-mongering over healthcare premium increases is a bunch of hullabaloo and saber rattling by insurance companies trying to retain excessive profits. In the late 90s, my small business dealt with 12+% premium increases every year, starting at a time when S corporations could not deduct premium costs for owners while big corporations were writing off top-of-the-line policies for executives. While the tax ramifications changed by the end of the Clinton administration to be more fair to small businesses, annual premium increases have always been the norm, and profits by the top companies that provide healthcare insurance have always been a the root of the high cost of healthcare. It is more likely that once the ACA is completely in place and the uninsured are absorbed into the system, overall costs will go down and competition will keep premium increases in check. Let's find out.
  • tryagain
    Apparently the insurance companies found a way to raise premiums again. Turns out they were the problem to begin with and there's no plan to fix their wagons.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT