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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.

2014 Premiums: How High Will They Go?

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Question: I thought premium levels are locked in for individuals based on their income between that sliding scale of 2%-9.5%. But i just read article stating subsidys wont be enough to overcome huge increases on rates. Won’t rates be moot if the premium levels are locked in?

Answer: For anybody eligible for subsidies, their contribution to the total premium is fixed on a range between 2% and 9.5% of income. So, for the subsidized, it doesn’t make any difference what the final rates are. Their costs are fixed. While there have been many scary stories lately about rate shock, 2014 rates in California are estimated (Milliman) to increase 30% over 2013 on average. On an individual basis, age and income will determine how much of an increase. The subsidized group are likely to pay about 47% to 84% less in monthly premiums compared to 2013. The young (below 40) and un-subsidized will see the highest premium increases. Some of older un-subsidized group will have lower premiums than today for better coverage. On a positive note for the un-subsidized, coverage will be more comprehensive for all, meaning less out-of-pocket costs thus reducing the impact of higher rates.

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however even if the plans help reduce the overall cost for insurance; the un-subsidized group specifically the healthy ones,will not see much help as rates increase and they don’t qualify for subsidies and don’t utilize their insurance much, they will really feel the big impact of this huge transition and implementation time…including the group that’s priced out of the employer’s affordable plans but not affordable enough for the employee’s dependents. I wonder what type of changes will come out of this once this group starts feeling the pain.

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