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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Why are 2014 Premiums So High?

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Question: The 2014 monthly premium used in the subsidy illustration on your website is $1,187 for a family. Can you explain why it’s so high?

Answer: Yes. The “unsubsidized” premiums used in the premium subsidy illustrations are unrealistically high for California residents. Here’s some reasons of the top of my head:

  1. In 2009, while the Affordable Care Act was still being debated, the Congressional Budget Office (CBO) was asked to access how the ACA would affect healthcare costs by 2016. It was a very educated guess and part of the challenge based on predicting the rate of medical inflation over a 6 year period. They had no hope of being very accurate to begin with and, as it turns out, premium inflation (at least through 2012 was lower than forecasted. They came up with a annual premium of $14,250 for a family of four. That’s a national average, but California is well below the national average.

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