In a previous blog, we looked at the often prohibitive cost of health care under the system currently in place in America. There, we discovered that even mid-tier “silver” plans offered by Covered California can have deductibles north of $3,000. Today, Covered California announced regrettable news indicating that they were unable to stem the tide of rising costs, indicating that premiums will be 13.2% more expensive in 2017.
Over the last two years, Covered California has managed to stem the increasing cost of plans to the tune of single-digit percentages. That streak is over, as Americans can expect to fork over 13.2% more money per month for their health coverage. For citizens already burdened by costly premiums and sky-high deductibles, this news comes as yet another unwelcome squeeze to the pocketbook.
Why, after two years of approximately 4% increases, did the cost suddenly jump over 13%? In addition to general medical cost increases across the industry, an important federal program that subsidized the most expensive claims is set to expire. That means that people who don’t need expensive medical care will need to essentially chip in a little bit extra to cover those who do. This was previously taken care of by allocated budget, but those coffers have run dry.
Part of the reasoning behind Obamacare concerns citizens’ ability to “shop around” for a plan that makes both pragmatic as well as economic sense for them. However, that element of choice is growing slimmer by the day. UnitedHealth Group, the nation’s largest health insurer, is exiting the Covered California marketplace after only a year, citing an inability to make a profit on individual plans under this system. This leaves only four other insurers for people to choose from — hardly a competitive marketplace as initially envisioned under Obamacare.
One of the real concerns around the health care world right now is the terrible disparity between who can afford health care and who needs it. The premium increase coming next year could do even more to broaden that gap, as some research suggests that individuals feeling the squeeze may opt to be uninsured rather than pay the premium. For those people, alternative treatment plans (such as the ones offered at Urgent 9) provide a more feasible way of managing health costs. For now, rising premiums haven’t scared large numbers of Californians out of the health insurance marketplace (currently 92% of us have insurance). However, if this trend continues, the law as it stands may have the opposite of its intended effect by pricing citizens out of the very program meant to subsidize their health expenses.