California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Expert: Premiums for Individual Health Plans in Exchange Will Be High

Next year, premiums for individual health plans offered through the state health insurance exchange will grow significantly from current rates, according to a health insurance expert, the Sacramento Business Journal reports.

Last week, Garry Maisel -- CEO of Sacramento-based Western Health Advantage -- discussed the issue at a Drexel University-sponsored event on health care costs (Robertson, Sacramento Business Journal, 5/10).

Details of Exchange

The exchange -- named Covered California-- primarily will serve individuals and small businesses.

Supporters hope that the exchange will function similar to websites like Amazon and Expedia so that users will be able to choose between various health plans through an easily navigable online store.

The exchange is expected to open for registration in October (California Healthline, 5/10).

On May 23, the exchange is scheduled to name the health insurers that it has selected to offer plans through the online marketplace.

The insurers then will file proposed rates with state regulators.

Details of High Premiums

Maisel said that he thinks premiums for individual health plans "will go up 40% to 70% … and this will cause a national furor."

He said a variety of factors could boost premiums for individual health plans in the exchange, including that:

  • Policies will offer more choice and more closely resemble employer-sponsored health insurance;
  • Health plans will be paying a greater percentage of health care costs;
  • Insurers will not be able to deny coverage for individuals based on pre-existing conditions or charge more for poor health status;
  • Health plans will be required to charge younger beneficiaries a higher percentage of what older people pay for insurance;
  • Higher enrollment of older individuals will mean higher health care costs; and
  • Many individuals will be eligible for health plan subsidies (Sacramento Business Journal, 5/10).
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