MORE WORKING MIDDLE-CLASS CALIFORNIANS ARE BEING FORCED TO FORGO HEALTHCARE AS COSTS BECOME EVEN MORE UNAFFORDABLE
On July 19, Covered California announced a 8.7% weighted average rate change for the 2019 plan year. The proposed rates were negotiated with Covered California and filed with state regulators are subject to final review. The final rates will be published in time for the start of the open enrollment period in California on October 15.
In several California counties the average weight increase is in the double-digits with Monterey, San Benito and Santa Cruz counties being hit the hardest with an average increase of 16.0%.
Those receiving a premium subsidy from the federal government, however, are insulated from rate hikes to a large degree. This is because the amount one receives in premium subsidies will increase when premiums increase.
Sometimes the subsidy can be more than the actual rate increase, resulting in lower premiums for those that are subsidy eligible. Last year rates increased 25% on average with half of the increase being attributed to increases on Silver plans due to cuts in federal funding. However, the average change for a subsidized enrollee was an 11% decrease in premiums. Not only did the subsidized get shielded from the large rate increase, they ended up paying a lot less for their health insurance.
This is not the case for those that don’t receive any assistance from the government and are forced to pay the full blunt of any rate increase.
According to Covered California, the average monthly premium for a subsidized enrollee has increased $21 since 2014 or $252 annually.
In comparison, an unsubsidized enrollee’s average premium has increased from $373 to $547 in the same time span. That’s an annual average increase of $2,088; that’s a signficant increase considering that’s roughly equivelant to one month’s rent for an apartment in Los Angeles.
HALF OF CALIFORNIANS THAT BUY THEIR OWN INDIVIDUAL HEALTH INSURANCE PAY THE FULL PRICE FOR HEALTH INSURANCE BECAUSE THEIR HOUSEHOLD INCOME DISQUALIFIES THEM.
These people are not considered to be high income. They are primarily the working middle class and are struggling to afford healthcare since the Affordable Care Act was implemented. The average annual income for consumers that pay full price and buy their coverage directly from the insurance carrier is approximately $75,000 compared to a median overall income of $66,000 regardless of where coverage is purchased.
CALIFORNIA IS TRYING TO ELIMINATE ANY CHOICE CONSUMERS HAVE.
Because of this there has been a surge of enrollments in Healthsharing plans, also known as Healthcare Sharing Ministries.
In the last six years, HealthSharing has evolved and with one HealthSharing plan, membership is open to people all all faiths, religions and beliefs.
One HealthSharing plan in particular operates similar to what one would expect of insurance company, such as having a netowrk to pay providers directly, more like insurance than the others, so monthly contrbutions are paid to an escrow account and the plan pays the providers directly so the member is not having to file a claim or seek reimbursement.
HEALTHSHARING IS NOT FOR EVERYONE BUT MAY BE THE PERFECT SOLUTION FOR YOU.
A free report, 7 Ways HealthSharing May be Better than Insurance, is available at Healthsharing.com for consumers and insurance agents who want to explore HealthSharing as an affordable healthcare solution.
Brent Heurter is a founding member of the Institute of Certified HealthShare Advisors, an organization dedicated to promoting affordable healthcare solutions by training and certifying insurance agents. He can be reached at [email protected]