Covered California on Tuesday said insurance rates will jump an average of 12.5 percent for next year, driven in part by uncertainty about the future of Obamacare.
Peter Lee, executive director of Covered California, described 3 percent of premium increases as an “uncertainty surcharge,” fueled by the unclear future of the Affordable Care Act. Uncertainty about the law also will prompt a big private insurer, Anthem Blue Cross, to stop selling Covered California plans in Southern California.
“While we have done a lot in California to give plans some certainty, they’re still nervous,” Lee said of insurers.
Although a last-ditch Republican effort to repeal Obamacare failed last week, the Trump administration could still undermine the law.
It remains uncertain if the Trump administration will continue making monthly payments that allow insurers to reduce co-pays and deductibles for low-income consumers as required by the Affordable Care Act.
Roughly 649,667 people in Los Angeles, Orange, Riverside and San Bernardino counties purchase insurance through Covered California. Eleven insurers offer coverage throughout the state. And while Anthem Blue Cross scaled back, none dropped out for next year.
QWhy are rates going up?
ARates are mostly going up because of increased costs of providing medical care, Lee said. That accounts for roughly 7 percent of the increase. Another 2.8 percent comes from the end of a federal health insurance tax holiday. The remaining 3 percent is the uncertainty over the future of the Affordable Care Act, including whether the tax penalty for going without insurance will continue to be…
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