Covered California has been holding out on setting its premium rate increases, but time is wearing thin.
It's still unclear whether the federal government will continue cost-sharing reductions to subsidize public health exchanges. The subsidies help keep premium rates down for Covered California shoppers.
If Congress doesn't make a decision by Oct. 11, Covered California will move forward with its contigency plan. They'll assume federal contributions are finished, and add a surcharge to silver tier plans on the exchange.
The exchange's executive director, Peter V. Lee, says the goal is "to be the least confusing possible, to protect consumers that have subsidies, and protect consumers that get no subsidy from having an unwarranted increase in their prices. We believe that the policy we have in place will do that, and it is not ideal. The ideal thing is for the federal government to act."
Premium rates for silver tier enrollees could jump 12.4 percent for next year. That’s on top of a previously announced 12.5 percent average increase for all shoppers. Some people will get a higher federal tax credit to make up for the increase, but others will have to choose whether they want to take on the extra out-of-pocket costs.
Covered California enrollees will be able to view their options on an online "Shop and Compare" tool available Oct. 11.
Charles Bacchi of the California Association of Health Plans says making decisions about rates so close to enrollment is unusual. Typically, plans provide information to consumers as far in advance as possible. There are also forms and packets to be mailed out ahead of time.
“We need to be able to get them their notices on time, to give them the ability to decide what their choices are going to be when open enrollment actually opens up," he says "So yeah we are running out of time.”
The silver tier plans are the only plans in the exchange that were benefiting from the federal cost-sharing reductions, so they'll be the only plans affected if funds are pulled.
About 1.4 million Californians buy insurance on the public marketplace.