Health insurance proposal could make coverage more expensive in California

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California health Insurance costsNew proposal could make health insurance premiums spike

A new proposal facing the California Legislature could split the state into six new financial regions that could have a profound impact on the cost of health insurance throughout the state. While state lawmakers have been working to make insurance coverage more affordable, the proposal may derail these efforts by making coverage considerably more costly for many consumers, according to the state’s Department of Insurance. Insurance Commissioner Dave Jones warns that introducing these new zones could make coverage nearly unattainable for a large portion of California’s residents.

Regulators warn of higher premiums

According to the Department of Insurance, the proposal could drive premiums up by as much as 23% in many parts of the states. Certain policyholders, typically those with significant health issues, could see their premiums rise beyond that estimation. In many cases, regulators suggest that some policyholders will be paying excessive amounts of their coverage, even if their coverage is identical to that held by those that are paying less.

Lawmakers aim to separate state into six regions

Separating the state into six financial regions is linked to the Affordable Care Act. States are required to implement the federal law in a manner that they deem fit, thus California lawmakers have been introducing numerous proposals that could help the state comply with the Affordable Care Act. Proponents of the latest proposal suggest that separating the state into six regions will help regulators management the costs associated with health insurance more efficiently. Regulators, however, claim that such a move will introduce inordinate financial strain on consumers.

Trade groups oppose six-region map

Consumers and regulators are not alone in their concern over the proposal. Two health insurance trade groups, the California Association of Health Plans and the Association of California Life & Health Insurance Companies, oppose the proposal as well. The trade groups suggest that a 19-region map would be much more plausible, as it would not drive up the costs of coverage in any significant fashion. Insurance Commissioner Jones claims that a 19-region map would also be problematic for the state, suggesting that such a measure would drive up insurance premiums by 25% statewide.

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