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Those of you who live in the Bay Area may have read with some shock the page one article in Monday's (October 16, 2016) edition of the Chronicle, "Covered California's insurance hikes are starting to pinch." The article highlighted a situation that many of us have been concerned about for sometime. After an initial three years of largely containing the rising costs of health insurance in California, Covered California will not enjoy the same level of successful price control for its customers in 2017.

Since Covered California began operating in 2014 under the Patient Protection and Affordable Care Act (ObamaCare) average increases in health care premiums have been less than 4 percent per year. That was a substantial improvement on the double-digit annual increases that prevailed in previous years. But the unhappy era of double-digit increases will return in 2017, when the average cost of health care policies will go up by 13.2 percent. 

Covered California has begun sending out rate increase notices for 2017 policies to its roughly 1.4 million enrollees, and many policy-holders are not pleased. It should be noted that the 13.2 percent increase for 2017 is a state-wide average. Some geographic areas fared better and saw lower increases -- generally those areas with several insurance carriers and less concentrated hospital and provider markets. Similarly, different insurers have raised premiums at different rates. Two of California's largest health insurers, Anthem and Blue Shield, posted average increases of 17.2 and 19.9 percent, respectively.

Consumers can take some comfort from the fact that increased premiums will be buying an improved product in 2017. For example, Covered California has required that all sponsored policies in 2017 reduce the number of services that are subject to a consumer's deductible. In addition, Silver 70 plans (among the most popular) will lower the cost of an urgent care visit payable by the insured by as much as $55 per visit, and the cost of a primary care visit by $10 per visit. Silver, Gold and Platinum plan holders will pay a flat copay for emergency room visits without having to first satisfy a deductible. And, urgent care costs in every 2017 plan will be reduced to that for a primary care visit.

However, consumers must also examine changes to their plans imposed by the insurer. Although many central features of the plans are mandated by Covered California, some secondary, but still critical, features are determined by the insurer. By way of example, Ted Weinstein, the consumer featured in Monday's Chronicle article, is concerned that the new terms of his 2017 policy will not permit him to visit an out-of-network doctor or hospital.

The point is, now is the time to review your health insurance policy and your plans for 2017. Covered California states that by shopping around and considering other plans nearly 80 percent of consumers will be able to pay less in 2017 than they are paying now for health insurance or will be able to hold increases to no more than 5 percent  percent. Of course, price is not the only factor that consumers will want to consider. Access to specific physicians or hospitals is also usually a high priority.

I did a quick survey of Silver and Gold plans available in my geographic area. (Silver and Gold plans are the most commonly selected policies. Silver plans impose a $35 charge for primary care visits, a $15 charge for generic drugs, and annual deductibles of $5,000 per family and $500 per person. Gold plans charge $30 for primary care visits, $15 for generic drugs, and have no deductibles). The monthly premiums on the six Silver plans that would be available to me range from $1,002.74 to $1,278.50, and the monthly premiums on the seven Gold plans I have access to range from $1,110.51 to $1,560.09. (Those premium figures assume no federal subsidy. Monthly premiums may be reduced through federal tax credits for certain consumers depending upon projected annual earnings). That represents a substantial price differential, making it well worth your while to consider your plan options before automatically re-upping with your 2016 insurance provider. And keep in mind, if you do not react by December 15, you will be automatically enrolled into your existing plan.

If you want to speak with an independent and experienced insurance broker who can help you understand your options and help you work through the sometimes confusing jargon of the industry (premium, co-pay, coinsurance, deductible, out-of-network, etc.) at no cost to you, please contact me for prompt, courteous and knowledgable service.

Alex Pfeifer,
650 762-7080
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