Health insurance costs may double for thousands of Valley residents

Monthly costs for insurance through Covered California will double for 14,000 Tulare County residents if Congress does not extend federal assistance by Oct. 1

SACRAMENTO – Thousands of low-income residents in Tulare County could see their health insurance costs double next year if Congress does not extend financial assistance to lower their costs in the state’s health insurance marketplace.

One year into the COVID-19 pandemic, Congress passed the $1 trillion American Rescue Plan Act (ARPA), a part of which subsidized premiums in state-run health insurance marketplaces established under the Affordable Care Act. ARPA provided $1.6 billion in subsidies to California’s health insurance exchange, known as Covered California. ARPA funding lowered the monthly premium paid by Covered California consumers by 20% from 2021 to 2022 and 92 percent of consumers were eligible to receive financial help. The subsidies helped insure an additional 600,000 people under Covered California which now provides insurance to about 1.8 million Californians, according to the health insurance marketplace.

The federal assistance will expire on Oct. 1 unless Congress votes to extend the funding or take other actions to maintain the subsidies. If Congress does not take any action, an estimated 1 million Californians will pay nearly double for their premiums next year and 220,000 Californians may become uninsured in 2023, according to the Labor Center at UC Berkeley. Many of those affected live in the San Joaquin Valley. 

“The American Rescue Plan’s financial help is a lifeline for millions of Americans, keeping health insurance more affordable and within reach,” said Jessica Altman, executive director of Covered California. “Millions of Americans are counting on Congress, as cutting the financial help that the law provides means many families will face the difficult choice of becoming uninsured and rolling the dice if they get injured or sick.”

More than 14,600 people have health insurance through Covered California in Tulare County and two-thirds of them have subsidized policies. On average, low income residents – an individual making $17,775-$32,200 per year or a family of four earning $36,570-$66,250 per year – in Tulare County pay just $44 per month in 2022 for a policy that would normally cost $686 per month. In July, Covered California announced a 6% increase in premiums statewide for 2023, including a 5.6% increase for enrollees living in Region 10, which includes Tulare County as well as San Joaquin, Stanislaus, Merced and Mariposa counties. The increase means local households will only pay an extra $2 per month if Congress votes to extend the subsidies. If not, low income residents will see their rates increase by 86%, an extra $40 per month, for a total of $86 per month on average after Jan. 1, 2023. About 8,700 Tulare County enrollees are living within 250% of the poverty line. More than half (57.4%) of those near the poverty line are Latino.

“Covered California stands ready to move mountains if Congress elects to extend the American Rescue Plan’s subsidies, but every single day matters,” Altman said. “The longer we go without a decision, the harder it will be to implement a new subsidy structure and avoid consumer confusion.”

Middle-income residents, — individuals who earn more than $51,520 per year and families of four who earn more than $106,000 per year — would not be eligible for any federal financial help. In California, these middle-income consumers would see their costs increase by an average of $272 per month.

Unsubsidized consumers could mitigate the rate change by switching to the lowest-cost plan in the same tier, saving an average of 5.8% on their gross premiums, but would have higher out-of-pocket costs which could delay or prevent them from accessing care. Only about 670 enrollees in Tulare County are considered middle income. 

“The American Rescue Plan built on the Affordable Care Act and allowed more people than ever before to get the protection and peace of mind that quality health care coverage provides,” Altman said. “Whether you are one of Covered California’s record-high 1.8 million consumers, or you get your coverage directly from a health insurance company, you will be paying more next year if these subsidies are not extended.”

Altman and executives for 18 other state marketplaces signed a letter to congressional leaders on July 19 highlighting the potential ramifications if the ARPA funding is allowed to expire. If that happens, Altman said California is ready to step in to mitigate some of the impact. In the most recent state budget, California allocated $304 million to a state subsidy program, which would benefit both low- and middle-income consumers. While the funding is significant, and would help make health insurance more affordable, the state funding would represent less than 18% of the amount it received in federal assistance under the ARPA.

“Americans need access to reliable, affordable health coverage and care, so we encourage your action to extend ARPA’s affordability measures,” the letter stated. “The financial pressures from substantial increases in food, housing, and transportation, as well as higher premiums in 2023 due to medical inflation, will cause millions more to become uninsured unless ARPA’s needed consumer protections remain in place.”

Congresswoman Connie Conway, who represents most of Tulare County, did not return calls as of press time.

For those currently seeking health insurance through Covered California, many Californians can take advantage of a special enrollment period through the end of this year. Eligibility depends on qualifying life events such as losing health coverage, getting married, having a baby, permanently moving to California or moving within the state where new carriers are offered.

In addition, there are several qualifying life events that are available due to the public health emergency and ARPA:

  • You or a family member have been affected by the COVID-19 pandemic.
  • You have a household income under 150 percent of the federal poverty level, which is less than $19,320 for an individual and $39,750 for a family of four.
    • Eligible consumers in this income bracket can find Silver 94 plans, the most generous coverage available through Covered California, with no monthly premium.
  • You paid the penalty because you did not have health insurance.

Consumers who sign up during special enrollment will have their coverage begin on the first of the following month. Consumers can check their eligibility and options at CoveredCA.com.

“Californians can still benefit from the American Rescue Plan for the rest of the year if they need health insurance right now,” Altman said. “Right now, two of every three Covered California enrollees can get name-brand coverage for $10 a month or less, thanks to the expanded eligibility and record financial help through the American Rescue Plan.”

All Californians are eligible for health insurance through Covered California. Consumers can use the website’s shop and compare tool to see if they are eligible for financial help and which plans are available in their area. They can also find the nearest certified enroller by visiting https://www.coveredca.com/support/contact-us or call (800) 300-1506 to get information or enroll by phone. The online enrollment portal and certified enrollers will also help people find out whether they are eligible for Medi-Cal. Medi-Cal enrollment is available year-round, and the coverage will begin the day after a person signs up.

Since the enactment of the Affordable Care Act (ACA) in 2010, California has reduced the number of uninsured from 6.5 million in 2011 to a projected 2.99 million in 2023. 

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