In For A Shock: Exchange Customers Get Glimpse Of Painful Rate Hikes

People standing in line to sign-up for Covered California enrollment event. (Irfan Khan/Los Angeles Times via Getty Images)

Covered California’s big 2017 rate hikes are starting to hit home for consumers.

The state health insurance exchange began mailing notices to its 1.3 million customers on Wednesday, alerting them that they can determine exactly how much the premiums for their current plans will rise in 2017, and begin shopping around for cheaper options.

The letter urges them to sign into their Covered California accounts at www.coveredca.com and use the agency’s updated “Shop and Compare” tool to see how much premiums will be for their current plans compared with others in their region.

Many are in for a shock. After two years of moderate increases, Covered California officials announced in July that premiums will balloon by a statewide average of 13.2 percent in 2017.

Until now, however, consumers didn’t know exactly what that would mean for them, because health plan prices vary across the state, within regions, by insurer — and also by family size, age, income and other factors.

When Paula Schwartz of Los Angeles called Covered California Wednesday to inquire about her rate hike, she was told the out-of-pocket cost for her monthly premium — after tax credits are applied — would rise from $162 this year to $254 next year, an increase of about 57 percent.

“I’m very angry and disappointed,” said Schwartz, 56, who has a silver-level PPO from Blue Shield of California. “I feel like they don’t care about us.”

If you, like Schwartz, are facing a big rate hike, exchange officials urge you to consider other plans. About 80 percent of exchange consumers will be able to cap their premium increases at 5 percent if they shop around and choose the lowest priced plan at their current level of benefits, said Amy Palmer, the agency’s director of communications.

For some people, that may be the plan they already have, she said.

“Shopping is important this year,” Palmer added.

But Schwartz doesn’t want to switch plans because she doesn’t want to lose doctors she has come to know and trust, and who are familiar with her medical history, she said.

Mostly, she fears that rates will continue to climb in the coming years.

“That’s the biggest, scariest thing. How high is it going to go?” she asked.

The open-enrollment period for Covered California, as well as the open market, starts Nov. 1 and ends Jan. 31, 2017.

But existing Covered California enrollees can start renewing or switching their plans now, with a Jan. 1 effective date, Palmer said. Those who do nothing will automatically be reenrolled in their current plans.

The vast majority of Covered California enrollees’ incomes qualify them for tax credits that reduce their monthly premiums. Those credits will increase as their premiums rise and, all things being equal, absorb at least some of the rate hike.

The online “Shop and Compare” tool will tell you how much your tax credits will be next year if you sign into your account, Palmer said.

Palmer and others advise consumers who are shopping for a plan to look beyond the premiums to out-of-pocket costs. In some plans, co-pays will be lower for certain services, such as urgent care and primary care, she said. And in some cases, emergency room visits will no longer be subject to a deductible.

At the same time, deductibles and out-of-pocket maximums are going up for many plans. For example, the individual out-of-pocket maximum for the bronze plan will rise from $6,500 this year to $6,800 in 2017. The family out-of-pocket maximums are double those amounts.

Kevin Knauss, an insurance agent based in Granite Bay, near Sacramento, said consumers may be able to save money by switching to another type of plan.

“Someone may find themselves with a PPO plan they just can’t afford anymore” and some HMOs will be less expensive than PPOs, Knauss said.

Finally, if you’re considering switching plans, remember this mantra: “doctors, doctors, doctors,” he said.

If you want to keep you doctor, find out which other Covered California plans, if any, he or she participates in. The same goes for hospitals, he said.

“Just because a carrier offers a PPO plan next to their HMO plan, it does not mean the same providers are in each of those plan networks,” Knauss noted. “Some HMOs may have some hospitals the PPOs don’t, and vice versa. Don’t make assumptions.”

Cindie Flannigan, 57, of Venice, has a PPO through Anthem Blue Cross and “has managed to avoid HMOs all my life,” she said.

But now that she’s facing a 70 percent increase in her premium, she said she might consider switching to one.

“Maybe there’s no choice,” she said.

Her premium will rise from $210 this year to $357 next year after tax credits are applied, she said.

“I’m still beyond shocked. I’m speechless,” Flannigan said. “It’s got to be devastating for so many more people. It makes me feel sick to my stomach.”

Categories: Capitol Desk, Covered California

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