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SACRAMENTO, Calif. — After putting off routine health care for much of the pandemic, Americans are now returning to doctors’ offices in large numbers, a trend that is beginning to show in higher insurance rates across the country.
Health insurers in individual markets in 13 states, including Texas and Washington DC, will raise rates by an average of 10% next year, according to a review of rate filings by the Kaiser Family Foundation.
That’s a huge increase after premiums have been roughly flat for several years during the pandemic, as insurers seek to recoup costs to get more people using their policies, combined with record inflation that’s driving up prices on just about everything. , including medical care.
The rate review also included Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington.
“We’re at a point in the pandemic where people are using health care that they may have put off before,” said Larry Levitt, executive vice president of health policy for the Kaiser Family Foundation. “We have a double whammy right now from people using more care and inflation throughout the economy.”
In California, state officials announced Tuesday that rates would increase an average of 6% next year for the 1.7 million people who buy coverage through Covered California, the state-run health insurance marketplace. That’s a big jump after years of record low increases, when rate hikes averaged about 1% over the past three years.
Increased use of health plans was the main reason for the increase, accounting for four percentage points, according to Jessica Altman, executive director of Covered California.
“That’s really the consistent message that other states are seeing as well, and even more so than California,” he said.
About 14.5 million people bought individual health coverage through state marketplaces this year, according to the Kaiser Family Foundation.
That’s a small portion of the total number of insured Americans, since about 155 million people get their insurance through employer-sponsored coverage. But Kaiser said individual plan filings are more detailed and publicly available.
The annual open enrollment period for when customers can shop for and buy 2023 coverage begins this fall. That’s the main window each year when people in the individual market can buy coverage or switch plans.
How much people will pay for coverage depends on a variety of factors, including where they live and the type of plans they choose.
The rate increases come as Congress debates whether to extend financial aid to consumers through the American Rescue Plan, the $1.9 trillion economic relief package Congress approved last year to combat the economic impacts of the pandemic.
The American Rescue Plan included significant funding to keep health insurance premiums low for people who buy coverage through state marketplaces.
California receives about $1.7 billion a year from those funds to make sure no one pays more than 8.5% of their household income in monthly premiums.
If that assistance expires at the end of this year, about 3 million Americans, including 220,000 Californians, will likely drop coverage because they can no longer afford it, according to an analysis by Covered California.
With no guidance on whether Congress will extend assistance next year, some insurers have reacted by proactively raising rates in anticipation of people dropping coverage. The uncertainty accounted for half a percentage point of California’s 6% increase, Altman said.
California officials have pushed hard for Congress to extend financial assistance through the American Rescue Plan. In general, the price of health insurance premiums depends on who buys the coverage. If it is mainly sick people, the premiums are more expensive. If more healthy people buy them, the premiums cost less.
Altman said California has managed to keep its rate increases below the national average in part because more healthy people are buying coverage through Covered California than most other states.
She said that’s partly because of a California law that taxes people who refuse to buy health coverage. But she said it’s also because of subsidies that keep premiums down so more people can afford them.
Altman said that not extending federal financial assistance would leave some people without coverage and “is the central result that we should be concerned about here.”
“That would be a big step backwards,” he said.