Audio: California blames Trump administration for health care price hike


The 1.4 million people who buy insurance through Covered California will likely want to do some comparison shopping for their 2018 health plans. State regulators announced the most popular plans on the state exchange will include an average 12.4 percent surcharge next year.

Californians will soon start receiving notice of their increased rates. State regulators blame them on the inability of Washington lawmakers to commit to pay cost-sharing subsidies through 2018. Those payments cover certain out-of-pocket costs for low-income people.

“Thanks to President Trump’s and Congressional Republicans’ inaction, the 2018 health insurance rates are higher than they would otherwise be,” California insurance commissioner Dave Jones wrote in a statement.

In 2018, a surcharge that ranges between 8 and 27 percent will apply to Covered California’s silver-tier plans to cover the potential loss of federal dollars. But exchange officials say most of that increased cost will be absorbed by federal subsidies that consumers get to help them pay for their premiums.

“Given the options, Covered California is doing what it can to ensure that consumers are shielded from the cost increase,” said Amy Adams with the California Health Care Foundation.

Covered California estimates 78 percent of the 1.2 million Californians who receive premium subsidies will pay about the same as they would without the surcharge. The federal government will, however, will not see any savings.

“This is not a great work around. This is actually a more costly one for the government, because as the premiums rise, then so does the amount of tax credit or subsidy that consumers receive,” said Covered California spokesperson James Scullary.

An analysis released by the Congressional Budget Office in August seems to confirm that point. Nationally, it estimates discontinuing cost-sharing subsidies could increase the federal deficit by $194 billion over the next ten years.

Consumers considering their own monthly budgets will want to shop carefully for their 2018 health plans.

“I would encourage consumers to go to the Covered California website, talk to an enrollment counselor, shop around, understand their options,” Adams said.

Adams acknowledged that choosing a health plan during the coming open enrollment period could be trickier for consumers than in past years, but state regulators say there are options.

Scullary explained that for the 65,000 Californians who don’t get premium subsidies and who currently buy silver plans, they may want to consider another type of plan that won’t have an added surcharge. He suggested they look at the bronze and gold tiers, among other options. 

“They will be able to go outside of Covered California. They may be able to purchase a plan directly from the carrier that has a benefit design similar to what Covered California offers that will not be subject to the surcharge,” Scullary said. 

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Audio: California blames Trump administration for health care price hike

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