Health insurance may soon get more expensive for individuals
Californians can expect to see major changes to their state’s health insurance market next year as the Affordable Care Act becomes fully enacted. Covered California, a non-profit, pseudo-government group that will be managing the state’s health insurance exchange, has released a new study concerning the effects the health care law may have on the individual market. The study suggests that prices for health insurance coverage in the individual market are going to experience some volatility in the coming year, with some consumers paying a lot less for their policies where others are expected to pay much more.
Study shows that rates are likely to rise in the coming year
According to the study, much of the Californian individual market will experience double-digit increases in health insurance rates. These rate increases will be made common by the losses that health insurance companies are expecting to see as the Affordable Care Act takes effect. State insurance regulators currently lack the authority to bar rate increases coming from these companies. The study indicates that many consumers can see the cost of their health insurance rise by as much as 20%.
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Lower income individuals may benefit from subsidies
The study does not only predict health insurance becoming more expensive; it also suggests that coverage will also become more affordable for some consumers. According to Covered California, individuals that make $45,000 annually or less are likely to see their premiums drop between 47% and 84%. This is largely due to these consumers being eligible for subsidies from the state and federal governments. These subsidies are meant to make health insurance more accessible to those that would not be able to afford coverage regularly.
Income may determine ultimate cost of coverage
Income will be the deciding factor on the cost of health insurance coverage in the state, according to the study. While health insurance companies are likely to raise rates to account for any potential losses they may see, a person’s income is expected to play the most important role in the cost of coverage. Those that earn less will benefit from subsidies, while those that earn more will have to pay higher rates without the help of the state or federal government.