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Big premium hike? Blame it on the kids

Courtney Perkes, Kaiser Health News on

Published in Health & Fitness

"Of all years to do this ... all these increases are just going to be horrifying," said Helena Ruffin, an insurance agent in Los Angeles.

In addition to a 12.3 percent average statewide premium increase, Covered California, the state's Obamacare exchange, tacked a 12.4 percent surcharge onto "silver-tier" plans -- the second-least-expensive level of coverage -- to offset Trump's decision to end federal payments for so-called cost-sharing reduction subsidies, which lower out-of-pocket costs for some low-income consumers.

In many states, premium hikes will be much higher next year.

Covered California spokesman James Scullary said next year's rate increases will be offset by a corresponding rise in premium tax credits, so the vast majority of consumers who qualify for those tax credits will be protected from the surcharge.

Scullary said Covered California did not have a figure to show how much the rate increase for kids contributed to the average statewide premium hike, but he said the overall impact was "very small."

But for many families -- especially those with more than one child and no tax credits to absorb their rising premiums -- the impact isn't small.

People like Kennedy-Simington, who buy their insurance in the individual market outside of Covered California, don't have subsidized premiums.

Neither do employees of small businesses, who are also subject to the new rates for children. One renewal notice for a small-group Health Net PPO, which covers three adults and two teenagers, shows that the kids -- ages 15 and 18 -- account for 60 percent of next year's total $412 premium increase.

But there may be one small silver lining: Adults may benefit, at least modestly, from spreading the rising cost of medical care across a wider age band.

The American Academy of Actuaries said in a report that raising rates for children to better reflect their costs will reduce adult rates, though by a "significantly smaller magnitude." The reductions will vary by insurer and depend on the number of children enrolled relative to the number of adults.

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