Kevin Knauss: Health, History, Travel, Insurance
Posts on the development and implementation of the California health insurance market place, application, account, enrollment, termination.
A review of health insurance rates in Northern and Southern California shows rates for young adults will increase between 30% to over 40%. Instead of the 6% to 16% increase in rates for adults only, families could experience a 20% increase in health insurance rates in 2018.
What has not been explained was if the increased Silver plan rates were based on existing Silver plan enrollments or projected enrollments. For those individuals and families who receive very little or no APTC the off-exchange Silver 70 plans will be 8.3% to 27% less expensive. People will naturally enroll in off-exchange Silver plans to save money. There will also be people who downgrade their plans from Silver to Bronze to save money, or, enroll in a Gold or Platinum plan for more benefits at an equal or lower cost of a Silver plan through Covered California. Either way, people will exit Covered California Silver plans in 2018. And since only the Covered California Silver plans have the increased rates, will that generate enough money to subsidize those people left in the enhanced Silver plans?
Previously, the CalHEERS application collected the same information for all consumers in a systematic, if non-user friendly process. The navigation and messaging provided in CalHEERS lead to frustration for many users. Also, there were some federal regulations that were not being met regarding the collection of information for some groups, such as veterans.
Now, the interface is easier to read and questions are user-friendly. Since not all questions are needed for all consumers, the application is now “dynamic” meaning questions that do not apply to a user are not displayed. This results in fewer questions and additional time savings for everyone.
By assuming that Covered California is one big selling machine, the report also paints agents as little more than clerks at a supermarket. Agents do more than just ring up the consumer’s purchase and then watch them take their goods out the door. Agents, just like Covered California customer service representatives, are available all year to help with reporting changes to Covered California and assist with health plan problems. Some agents have complained that Covered California helps enroll the easy cases and the agents must work with individuals and families who have more complicated households, immigration issues, and income questions that require more time.
If Bribes are a legitimate source of income for Medi-Cal why not for Covered California I thought? When I checked the 2016 Covered California Countable Sources of Income table, Bribes was suspiciously missing from the list. Why is Covered California hiding this significant source of income for many politicians from their consumers?
If a consumer was in a market where the only choices were Blue Cross and Blue Shield, and Blue Cross was the SLCSP (Blue Shield necessarily being the least expensive Silver plan offered) then these consumers may see their relative tax credit subsidy decrease. This will hold true if the Blue Shield plan, and now the only plan available, continues to have a rate lower than what Blue Cross would have had in 2018.
After sifting through all the reports and data, I’m not sure if either agency is accurately reporting voter registration inquiries through Covered California. While the online registration numbers look comparable between the Secretary of State and Covered California, it is unclear if the data is a measurement of a click to open an online registration web page or an actual complete voter registration action. The voter registration card requests from Covered California seem wildly inflated compared to what the counties are reporting to the Secretary of State. However the Secretary of States figures may also be corrupt by potentially erroneously high requests posted by San Bernardino County and the lack of requests from huge counties such as Los Angeles.
Based on the data I’ve seen, the ratio of the actuarially fair cost differential of insuring someone in their 20s and someone in their late 50s or early 60s is roughly 5 to 1. Setting the ratio at 3 to 1 causes distortions that unfavorably impacts young adults and, as a result, degrades the risk pool. Insurance companies are reluctant to put themselves in a position in which they risk losing money with additional customers and will set prices for older adults so that they can recover their costs in that age group. The 3 to 1 ratio limits how much they can reduce premiums for young adults. The resulting premiums represent “unfair” insurance for young adults and discourages them from purchasing insurance. Discouraging young adults from purchasing insurance exacerbates the adverse selection problem in the insurance market and reduces the incentive for insurance companies to compete for older customers.
If you reside in any of the above counties you will be able to keep your EPO plan. If you reside in any other county, and you have an Anthem Blue Cross EPO or HMO plan, through Covered California or off-exchange, you will need to select a new insurance carrier for 2018. The exit of Blue Cross from the individual and family market does not affect employer group health insurance plans or their Medicare Advantage plans.
Both DMHC and CDI make their rate review process as transparent as possible to the public. This is not the case for Covered California. The reason Covered California gets to negotiate rates in secret is because the health plans are considered contractors and the rates are considered bids. I learned this after I filed a Public Records Act request asking for the rates submitted to Covered California.
