SACRAMENTO, Calif. — The more affordable insurance plans under Covered California made possible by COVID-19 relief funds may fade away by the end of 2022, as the funds subsidizing the insurance costs are soon to expire.
A report published by Covered California on Wednesday show all its consumers would face premium increases. Among the consumers are one million insurance holders in the state earning less than $32,200 per year.
Enrollees who earn less than $52,000 per person would see their insurance premiums rise by $70 per month for 2023. Middle-class consumers could see premiums increase by an average of $272 per month for 2023, as well.
Covered California estimates more than 150,000 people in the state could be forced to drop their health insurance. But why?
Aid from COVID-19 relief
Under the American Rescue Plan Act of 2021, premium assistance was increased for consumers who receive tax credits under the Affordable Care Act. More than 200,000 low-income and middle-income residents enrolled into Covered California since 2020 because of the COVID-19 relief aid.
“The American Rescue Plan provided more financial help than ever before, and helped a record number of people get covered and stay covered,” said Peter V. Lee, executive director of Covered California. “Without an extension, millions of people will face staggering premium increases, and many will be priced out of their health care coverage.”
Lee also said the American Rescue Plan made insurance dramatically more affordable under the Affordable Care Act by:
- Capping health insurance premiums at 8.5% of household income
- Providing free 'Silver' plans for consumers who earned less than 150% of the poverty line, $19,230 for one person, or $39,750 for a family of four.
Monthly premiums paid by Covered California consumers dropped 20% from 2021 to 2022.
Why did Covered California publish this report?
Without subsidies provided by the American Rescue Plan, hundreds of thousands in the state will no longer receive the assistance it provides unless the plan is extended by lawmakers.
Many people may also try to remain insured by switching to less-comprehensive coverage, with higher deductibles and a lower cost. But in doing so, consumers could expose themselves to higher out-of-pocket costs that could delay or prevent them from accessing care.
Lee said the biggest beneficiaries of the lowered premiums and boosted enrollment have been communities of color, lower-income and middle class Americans.
“In the absence of federal action to extend these policies this year, people in California and across the country will have their access to health coverage and care dramatically reduced,” he said.
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