Health Insurance Rates

By Christopher Cadelago
Published: Monday, Nov. 4, 2013 – 12:00 am
Last Modified: Monday, Nov. 4, 2013 – 6:14 am

Hundreds of thousands of Californians who purchase their own health insurance are bracing to pay more for their plans, as the cost of the federal health care overhaul lands harder on middle-class customers.

Notices began arriving in recent weeks informing consumers that their plans are being phased out and replaced with policies that comply with requirements of the health care law. Many are being told to expect double-digit percentage increases in monthly costs, in part to help balance the cost of covering the underprivileged and those with pre-existing medical conditions who may not have had coverage.

The notices throw into sharp relief an e stirring reality of the law: While many will benefit, a smaller segment may not.

“There is certainly going to be heat around this, and lots of understandably unhappy people,” said Janet Coffman, a professor at the Philip R. Lee Institute for Health Policy Studies and the department of family and community medicine at the University of California, San Francisco.

“This is one important slice that is experiencing some very substantial increases in premiums,” she said. “But it’s important to understand this is one of many areas in which the impact of the health care law on individuals and families varies widely.”

Some customers with higher premiums will be shifted into more robust plans because of new requirements in the law. Others are moving into what they consider less attractive options with higher payments for care.

Jennifer Thieme lives outside San Diego and has an individual health policy for her 18-year-old son through Anthem Blue Cross. Thieme pays $72 a month with a $5,000 deductible and an annual out-of-pocket limit of $8,500. The first two visits to the doctor have a co-pay of $40, and the co-pay for generic prescription drugs is $15.

Last month, Thieme received a notice from her insurance company stating that because of the health care law, her policy will no longer be offered, effective Jan. 1. It didn’t offer specifics. Instead, the company suggested a plan for her son with a $5,550 deductible and $6,350 annual limit. It also called for a $50 co-pay for the first two office visits, and prescription drug co-pays ranging from $19 to $50.

This new plan will cost her $127 per month, an increase of about 76 percent.

“The annual out-of-pocket limit was the only thing that went down. It’s also the part of the plan I worry about the least,” said Thieme, 47 of Vista, a financial director for a nonprofit who does not believe she’s eligible for a subsidy. “The co-pays and the monthly fees have all gone up, and those are the things that affect me the most on a day-to-day basis.”

“We were told if you like it, you can keep it,” she added, referring to a pledge repeated by President Barack Obama.

“I was happy with my old plan, but I didn’t get to keep it.”

The president acknowledged last week that not everyone would be able to keep their plans.

“For the vast majority of people who have health insurance that works, you can keep it,” Obama said in a speech in Boston’s Faneuil Hall. “For the fewer than 5 percent of Americans who buy insurance on your own, you will be getting a better deal.”

He urged people receiving notices to shop around in the new marketplace.

Only those health plans active at the time of the law’s passage March 23, 2010, and unchanged since were granted grandfathered status. A more recent plan, even one that meets the law’s stricter requirements, could be phased out.

In California, a majority of the state’s 38 million residents receive health coverage from their employers or the government. Most will be unaffected by the changes in federal law.

Those who buy their own insurance are more likely to experience a change, and California has made some decisions that would speed that process. The number of people on the individual market is roughly 1.65 million, according to Covered California, the state’s health insurance marketplace.

Of that population, about 570,000 will qualify for subsidies and another 700,000 will see their premiums remain basically the same, the exchange said.

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