Reasons Health Insurance Rates Are Rising
There are protections for consumers to prevent insurers from raising rates each year. The state and/or federal government has to approve the increases. Still, that hasn’t prevented the insurance company from asking for relief. The reasons are many, but the key reason for the substantial increase seen this year is that consumers who signed up for insurance were sicker than the companies realized. Here are some of the other reasons rates are on the rise.
- The costs of healthcare is on the rise. Rates might not be growing as fast as they have in the past, but they still are going up. More specialty prescription drugs are coming to the market, which makes the costs of medications rise. The overall cost to operate a health care facility or office increases just like any other business.
- Insurers understand the risk pool much better than they did at the beginning of the ACA. In previous years, the premiums were set too low to cover the costs, but insurance companies have learned from that experience.
- Insurance companies must spend 80 percent of your premiums on your healthcare needs. When spending more than 80 percent of the premiums on healthcare, insurance companies learned this was not sustainable for business operations.
What to Do if Your Insurance Rates Increased
If you’re like many Californians, you may have gotten a letter advising you that your insurance rates will increase up to 30 percent next year. You do have options. You could switch health insurance plans and carriers, or find out if you qualify for a subsidy. The deadline is January 31, 2017. If you don’t have a plan in place before that date, you have to wait until next year for coverage. In addition, you will face penalties up to $695 or 2.5% of your household income for not having insurance. Don’t let that happen.
One of the best things to do is call a certified covered California health insurance broker, like Sackett & Associates Insurance Services. Reach our office by calling (707) 823-3689 to let us help you find the health insurance you need through Covered California during open enrollment. Take preventative steps for your health by having insurance to cover your costs.