RandomGuy
11-20-2017, 01:16 PM
"It’s working, it’s popular, and the threat doesn’t come from insurers dropping out but from the federal government pushing them out."
California has successfully implemented a federal law — but officials this year say much of their energy has gone into figuring out how to manage a successful marketplace while working with a federal government that has not only predicted but worked to hasten its implosion.
The state started on pretty solid footing, with one of the more competitive marketplaces in the country. It expects that 83 percent of health law enrollees will live in areas with three or more insurance options to choose from.
But it has also had to counter challenges. California announced this week that premiums will rise, on average, 12.5 percent, one of the biggest Obamacare hikes the state has experienced. Three-quarters of that is due to rising medical prices and a new tax on health insurers that will take effect in 2018. The other quarter, however, is an uncertainty surcharge — health plans trying to prepare for a world where the individual mandate isn’t enforced or outreach is minimal.
The state has focused much of its contingency planning on the cost-sharing reduction subsidies, an $8 billion fund that covers copayments and deductibles for low-income enrollees. The Trump administration has repeatedly threatened to cut off these payments, which could cause premiums to spike as insurance plans look to fill a big new budget hole.
California came up with a plan: If the Trump administration doesn’t commit to making these payments by the end of August, it will add a 12.5 percent surcharge onto all of its midlevel “silver” health plans. It will also run an aggressive marketing campaign to let Californians know about the surcharge, and that other options could be much cheaper.
By concentrating all the surcharge in one type of plan, it will, researchers expect, make other plans cheaper for the 84 percent of Obamacare enrollees in California who purchase coverage with premium subsidies. This is because the size of the tax credit is tethered to the price of the “silver” plan in the local area. If the price of the silver plan goes up, subsidized shoppers could take their bigger tax credit and possibly get a less comprehensive bronze-level plan for free — or go up to a more robust gold plan at little cost. (Read more about this idea, which actuaries from the firm Oliver Wyman have explored in detail, here.)
...
https://www.vox.com/policy-and-politics/2017/11/20/16667048/california-republican-tax-health-risk
California has successfully implemented a federal law — but officials this year say much of their energy has gone into figuring out how to manage a successful marketplace while working with a federal government that has not only predicted but worked to hasten its implosion.
The state started on pretty solid footing, with one of the more competitive marketplaces in the country. It expects that 83 percent of health law enrollees will live in areas with three or more insurance options to choose from.
But it has also had to counter challenges. California announced this week that premiums will rise, on average, 12.5 percent, one of the biggest Obamacare hikes the state has experienced. Three-quarters of that is due to rising medical prices and a new tax on health insurers that will take effect in 2018. The other quarter, however, is an uncertainty surcharge — health plans trying to prepare for a world where the individual mandate isn’t enforced or outreach is minimal.
The state has focused much of its contingency planning on the cost-sharing reduction subsidies, an $8 billion fund that covers copayments and deductibles for low-income enrollees. The Trump administration has repeatedly threatened to cut off these payments, which could cause premiums to spike as insurance plans look to fill a big new budget hole.
California came up with a plan: If the Trump administration doesn’t commit to making these payments by the end of August, it will add a 12.5 percent surcharge onto all of its midlevel “silver” health plans. It will also run an aggressive marketing campaign to let Californians know about the surcharge, and that other options could be much cheaper.
By concentrating all the surcharge in one type of plan, it will, researchers expect, make other plans cheaper for the 84 percent of Obamacare enrollees in California who purchase coverage with premium subsidies. This is because the size of the tax credit is tethered to the price of the “silver” plan in the local area. If the price of the silver plan goes up, subsidized shoppers could take their bigger tax credit and possibly get a less comprehensive bronze-level plan for free — or go up to a more robust gold plan at little cost. (Read more about this idea, which actuaries from the firm Oliver Wyman have explored in detail, here.)
...
https://www.vox.com/policy-and-politics/2017/11/20/16667048/california-republican-tax-health-risk