On July 25th, Covered California announced the biggest increase in premiums since 2018. This might make you ask-- will the deductibles being waived on the mid-level silver tier plans really do you any good if rates are going up?
Health insurance sold through the state marketplace will increase by nearly 10% for 2024. Covered California Executive Director Jessica Altman said its a "challenging year for health care costs" when asked about the 9.6% preliminary average on the hike. One-third of Californians will be protected from the increases if they stay with the same plan or region. Others will see little to no change because of federal and state subsidies.
The rate increases will vary by region, with more than one-third of enrollees potentially experiencing double-digit increases. Mono, Inyo, and Imperial counties experienced the largest increases in 2023 and it looks like they will also be the most impacted again in 2024.
We expect to also see a larger increase in the private market and individual and group insurance plans will be affected as well. CalPers estimates an overall premium increase of 10.77%, on top of an already higher monthly premium.
However, Altman claims that "Covered California's market remains stable and continues to deliver more choices to our consumers. Despite this year's [2024] increases...Californians [who enroll in health care coverage through Covered California] will have more help paying for their plan than ever. In fact, many consumers ... will see no change to their monthly premiums, and some will see their deductibles eliminated entirely." Based on past experiences, Covered California often increases the subsidy offered to offset the increasing costs of health insurance. We can only assume they plan to do that for next year, but as of yet it is unclear how much will be provided.
Covered California indicates the 2024 increase reflects a continued rise in health care utilization following the pandemic, inflationary pressures in the health care industry, higher drug costs, labor shortages, and wage costs.
We also have to take into consideration that as of July 1, 2023 over 225,000 Californians lost their free or low-cost health coverage while going through the now reinstated Medi-Cal renewal process. Over the next 12 months, California will be reviewing the eligibility for almost 16 million people. State health officials have previously estimated that between 2-3 million people could lose their Medi-Cal coverage by next June. About 40% of the state's population was enrolled in Medi-Cal during the pandemic freeze.
People who no longer qualify for Medi-Cal are being transitioned to Covered California, and it's likely this will drive up health care costs, depending on existing health care issues and income levels. There are some valid concerns that this benefit may come at too high a cost. Christine Eibner, a senior economist at the RAND Corporation research and policy think tank, observes: "That population is relatively expensive. People who are lower income have more health care issues, and bringing them into the market may lead to higher premiums." Those who are just above the Medi-Cal income guidelines will have larger subsidies.
As of this date, the average rate change for our region, 1, is estimated to be at 13.1%.
This will affect the following counties: Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne and Yuba counties. While the preliminary numbers show a large jump for us, other regions are seeing increases from 14.7%-15.8%. The smallest increase is a projected 6.8% in Alameda County.
We won't know until October-November how this will affect all of us. During the next couple of months carriers will be putting together preliminary rates and sending them off to the Department of Insurance for review. Subsidies will start being calculated in November. In our area, we are restricted to Anthem and Blue Shield. The trend in Shasta County has Anthem showing less expensive than Blue Shield and I am interested to see if they continue this for next year.
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Sources: Covered California, Cal Matters, Sacramento Bee, Sacramento Observer,