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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.


2016 Rate Increase?

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Question: I just received a mailing that states that our Anthem Blue Cross premium is going from $670 to $870 for 2016. We've reported no changes in income or family size (nor made any claims this year). As expected, the plan's deductibles, copays and OOP maximums have all increased. This is not the reasonable expected premium increases I've read about in the Covered CA press releases. We receive a subsidy. Our income for 2015 will be the same as for 2014 year. Is it safe to assume that the subsidy will not increase substantially to cover such a large premium hike? Hence our premium will now be an additional $200 out of pocket monthly?

Answer: If you are eligible for a subsidy, the net amount you pay after subsidy is set as a percentage of your income, so if your income is the same as 2015, your subsidy will increase to cover most if not all of the 2016 health plan rate increase. While the average 2016 rate increase for Covered California coverage statewide is 4%, there are anomalies. For example if you have a Blue Shield PPO plan in Monterey, San Benito or Santa Cruz county your rate could increase as much as 44%. This year both Blue Shield and Anthem Blue Cross offer PPO plans in all California counties, so don't renew your coverage without shopping all other plans in your area.

5 Comments

I make about $35,000/year, so I don’t qualify for any subsidies or financial assistance (because, you know — in Los Angeles, that’s SO MUCH money. But I digress…)

My monthly premiums in 2014 were approximately $392. In 2015 that rose to $423. In 2016 it jumped to $532. And as pointed out previously, our benefits have been reduced. In what other business can you hike prices by 26% and deliver a vastly inferior product?

I don’t know about anyone else, but I didn’t get a 26% raise this year, and I’m pretty sure inflation didn’t rise by 26% this year, so what’s going on?

To be fair, Blue Shield is not the only one playing this game… it’s a system-wide issue, but this company is SUPPOSED to be a non-profit. It’s SUPPOSED to have the public welfare as its primary goal. It’s SUPPOSED to be tax exempt, but that benefit was lost because of things they’re clearly running a pretty profitable operation. I mean…

Paul Markovich, Blue Shield’s CEO makes more than $2 Million/year. According to Michael Johnson, Blue Shield’s former public policy director and now a critic of the company, Markovich’s predecessor, Bruce Bodaken received about $20 Million as part of his 2012 retirement package (that’s in addition to his salary). The top 60 executives there brought it about $61 Million in 2012.

Sound like most non-profits you know?

I’m sure $110/mo. increase wouldn’t phase Mr. Markovich, but I’m now forking over 1/6 of my annual income for health insurance. In what world does that make ANY sense?

My monthly out-of-pocket health plan premium costs are 50% more than just two years ago when Covered California plans began on January 1st, 2014. That’s 50% more monthly premium out-of-pocket for the “same” Silver plan, which now actually has weaker Silver plan benefits.

Rate increases are much higher when you take into account the 2016 increased premium rates ALONG WITH lesser benefit rich health plans. For instance, the 2015 Bronze 60 plan with its 2015 current $5,000 deductible was assessed an average 4% rate increase for the new 2016 Bronze 60 plan, yet this new 2016 Bronze 60 plan now has a deductible which is $1,500 higher! That’s now a $6,500 deductible for the new 2016 Bronze 60 plan. Along with the plan’s average rate increase of about 4%.

Kristine, according to Covered California the “weighted average” 2016 rate increase in Santa Barbara county is 4.4%, yet you report increases of 30% and 15%. That’s a lot more variance from the average than I would have thought.

Thanks for your reply. The cover letter for our rate change says the increase is 30%. That’s for an Anthem PPO plan for myself and our 20 year old dependent daughter. My partner (we are not married) received a letter as well and his cover letter says his rate hike for his Anthem PPO is 15%. We are in Santa Barbara County. Are we in an anomaly county? We will definitely consider other plans. If the subsidy will rise to cover the rate increase, we really have no complaints and will probably keep the Anthem PPOs. That being said, if other PPOs have more providers, that would be a reason to switch. It’s slim pickings for providers in many of the specialties..

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