Health Insurance Rates Increase for 2017

Insurance companies have released their proposed rate increases for 2017.  As suspected, all carriers are increasing their premiums.  A good portion of the increase is due to the discontinuation of a reinsurance program that was initially available to help the insurance companies offset some of the higher costs they faced now that they are insuring chronically ill people as well as all others.  Without the reinsurance program, the additional costs have now been passed on to the consumer.

Because Pronoeo Insurance Agency is located in Region 2 of California, this article will focus on the rates in this location.  Region 2 consists of Sonoma, Marin, Napa, and Solano Counties.  However, the general ideas stated here are consistent with rate increases throughout the state.

You will hear in the news and in upcoming commercials that the “statewide weighted average increase” is 13.2%.  You will also hear that the “3 year weighted average increase” is 7%.  Whereas these are true and correct numbers, my personal opinion is that these are misleading numbers in an attempt to avoid discontent among the masses.  Let’s take a look at what to expect for 2017 in Region 2:

1. Anthem will be changing from a PPO plan to an EPO plan.  This means that there will be NO coverage for using a doctor who is out of network.  This is considered a narrow network plan.  Anthem’s rate increase will be 22.7% – 33% depending on which plan you choose.
2. Blue Shield of CA will stay a PPO plan in some areas and will be an HMO in certain zip codes.  They will have rate increases ranging from 13.5% – 19.1%.
3. Health Net is staying an EPO plan (through the Exchange) and will effect premium increases ranging from 22% – 24%.
4. Kaiser Permanente actually has the smallest increase in our Region: 0.4% – 7.5%.
5. Western Health Advantage will also have single digit increases of 6.95% – 7%.

It is nice to think in averages, but as you can see Anthem’s 33% is a far cry from the 3 year weighted average of 7%.  In actuality, if you look at the increases cumulatively since 2014 (when premiums jumped a whopping 53% in California) you would have a truer picture of how premiums have changed since the Affordable Care Act.  After the 53% increase, Region 2 has experienced the following increases from 2014 – 2017:

• Anthem Blue Cross has an effectual increase of 65.3%
• Blue Shield of California has an effectual increase of 65.4%
• Health Net has an effectual increase of 40.5%
• Kaiser Permanente has an effectual increase of 16.2%
• Western Health Advantage has an effectual increase of 17.9%

These increases have been gradual over the past 3 years and the actual amounts vary according to the plan you have.  But they are no where near the ‘weighted average’ of 7%.  And of course, deductibles and maximum out of pockets are inching up too.

The good news is that the subsidy allowance will be going up to help offset some of these increases for those who qualify for obtaining their health insurance through Covered CA.  If your income is over the 400% of the Federal Poverty Level, then you will be feeling the full force and effect of those premium increases.

Open enrollment for 2017 plans will begin November 1, 2016.  If you have questions about your health insurance or you want to see what options are available to you to help minimize the impact of these increases, contact Pronoeo Insurance Agency for a free consultation.  800-495-2886 or [email protected]