Covered California Releases Rates For 2016

Covered California Releases Rates for 2016
In 2016, the majority of Covered California consumers will see a decrease in their health insurance premiums or an increase of less than 5% if they keep their current plan. Covered California’s rates for 2016 reveal that the average increase will be 4%, which is lower than last year’s increase of 4.2%.  In addition, consumers who change to a lower-cost plan in the same metal tier consumers can reduce their premiums by an average of 4.5% and more than 10% in some regions.

California Health and Human Services Secretary and Covered California Board Chairwoman Diana Dooley said, “Since Covered California requires health insurance carriers to offer the same products at the same prices inside and outside Covered California’s marketplace, all people seeking to buy health insurance benefit from these rates.” Southern California Consumers can save an average of nearly 10% by moving to a lower-cost plan in the same metal tier while Northern California consumers could limit their rate increase to an average of 1%. The average premium increase is 1.8% for Southern California consumers who stay in their plan and 7% for Northern California consumers who stay in their plan.

COVERED CALIFORNIA RATE CHANGES
2014-2015 Change 2015-2016 Change
Weighted Average Increase 4.2% 4.0%
Lowest-Priced Bronze (unweighted) 4.4% 3.3%
Lowest-Priced Silver (unweighted) 4.8% 1.5%
If a consumer shops and switches to the lowest-cost plan in the same tier -4.5%

Covered California executive director Peter Lee said, “The sheer numbers and health of our enrollees allowed us to sit down with the health insurance companies and negotiate rates downward, which will save our consumers more than $200 million in premiums.” In 2013, Covered California discontinued health plans that did not meet basic standards. Lee said that this decision stabilized the market and helped create a healthier pool of enrollees. Lee said, “Covered California used recent data analysis in its negotiations with plans to prove that our mix of young and ethnically diverse enrollees are among the healthiest in the country; health plans responded by lowering their rates.”

Because of the ACA’s reinsurance and risk adjustment programs, premiums are lower, in general, and health plans cannot benefit by seeking to enroll a healthier population. Lee noted that Covered California is an active purchaser, which means that it can choose which plans participate in the exchange and negotiate the rates, networks, and quality elements to get the best value. Covered California’s standard benefit design creates a level playing field in which health insurance companies must compete on price and quality, Lee added. For details on factors that went into the rates, visit CoveredCA.com/news.

HHS Releases Substance Abuse Parity Rules

subabuseThe Departments of Health and Human Services, Labor and the Treasury issued a final rule that increases parity between mental health/substance use benefits and medical/surgical benefits in group and individual health plans.
Under the final rule, co-pays, deductibles, and visit limits cannot be generally no more restrictive for mental health/substance abuse disorders benefits than they are for medical/surgical benefits.
The rule also includes these consumer protections:
• Ensures that parity applies to intermediate levels of care in residential treatment or intensive outpatient settings.
• Clarifies how much transparency health plans must have, including disclosing the rights of plan participants.
• Clarifies that parity applies to all plan standards, including geographic limits, facility-type limits, and network adequacy.
• Eliminates a provision that allowed insurance companies to make an exception to parity requirements for certain benefits based on “clinically appropriate standards of care.” Clinical experts have said that this exception was not necessary, was confusing, and was open to abuse.

In January, as part of the President and Vice President’s plan to reduce gun violence, the Administration committed to finalize this rule as part of a larger effort to increase access to affordable mental health services and reduce the misinformation associated with mental illness.

Administration Releases New Rules To Implement Health Law’s Individual Mandate

by Mary Agnes Carey

Reprinted with permission from Kaiser Health News (kaiserhealthnews.org.)

As congressional Republicans push for a delay in the 2010 health law’s individual mandate, the Obama administration announced final regulations implementing the requirement that most Americans have health insurance coverage by Jan. 1 or pay a fine.

The document from the Treasury Department and the Internal Revenue Service is in addition to regulations the Department of Health and Human Services published in late June.

The regulations specify nine categories of individuals who are exempt from the mandate, including people who can’t afford coverage or taxpayers whose income is so low they don’t have to file a tax return, according to a fact sheet from the agencies. People in jail or who are not in the country lawfully are also exempt, as are individuals who experience a coverage gap of three months or less.

When filing 2014 taxes in 2015, individuals must say on their returns if they have health insurance coverage and, if not, pay a fine. The individual penalty is the greater of $95 or 1% of income, rising to the greater of $695 or 2.5% of income, in 2016. The Congressional Budget Office estimates that less than 2% of Americans who don’t have health insurance will pay the fine.

In July, the Obama Administration delayed for one year a provision in the health law that employers with 50 or more workers offer coverage to employees or pay a fine. Republicans said that if the administration delayed the employer mandate for a year, individuals should also get a reprieve from the health law’s individual mandate set to begin next January. In July, the House of Representatives passed legislation to delay the individual mandate requirement for a year, but the measure is not expected to come to a vote in the Senate.

Tuesday’s announcement from Treasury and the IRS — along with the final individual mandate regulations that HHS issued in June — make it clear that the administration is moving ahead with implementing the individual mandate, which has become one of the law’s most politically explosive elements. House Republicans have tried to repeal or defund the law 40 times on the House floor and more votes are likely this fall.

Supporters of the law and many health care economists say that the requirement that most Americans have coverage or pay a fine is critical to making the law work as intended.

The individual mandate is one of two lynchpins that make the Affordable Care Act work, Washington state Insurance Commissioner Mike Kreidler said in a statement. You simply cannot guarantee everyone coverage — regardless of their health status — without also requiring that everyone participate. The individual mandate guarantees personal responsibility. Without it, there’s nothing to prevent people from only buying health insurance when they need it — which is similar to allowing people to buy homeowners insurance when their house is on fire.

America’s Health Insurance Plans, a trade group representing health insurers, wants the health law’s tax on health insurance plans repealed but supports the individual mandate.

There is broad agreement that requiring health plans to cover everyone, including those with pre-existing conditions, cannot work without an individual mandate, the group said in a statement. By requiring all Americans to get health coverage, the risk pool becomes large enough to account for the sickest Americans, without the adverse effect of skyrocketing premiums.

Last Updated 06/23/2021

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