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WellPoint among 13 picked to join California exchange

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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.
 

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  • 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.

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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