How California health care premiums could skyrocket if shutdown continues

WASHINGTON — Sixty years old, living as a couple in the Sacramento area or California's Central Valley? Figuring your income next year will be about $85,000?

The premium increases for that couple are likely to be among the nation’s steepest, if enhanced federal subsidies for people using Obamacare-inspired health insurance policies are allowed to expire at the end of the year, as is now planned.

The fight over continuing the subsidies is a major flashpoint in the battle over whether to reopen the federal government. Democrats insist on continuing the enhanced subsidies, which were enacted in 2021 as a way of providing relief from the COVID-driven economic downturn.

Republican leaders have said they will only discuss any proposals once the government reopens. Democrats counter that they won’t back a reopening until the continuing subsidies are in place. On Monday, the two sides remained deadlocked over the subsidies as the shutdown entered its 20th day with no obvious end in sight.

In many cases, those policyholders could pay three or four times what they are charged now.

An analysis by KFF, a nonpartisan health research firm, looked at the anticipated premiums this couple would pay and found older people with higher incomes “would be hit the hardest.”

Others up and down the age and income spectrum are also in for higher premium increases.

Even if the enhanced subsidies survive into 2026, Covered California, which manages the health care marketplace in the state, estimates premiums will increase an average of 10.3% statewide. Without the credits, the organization estimates, the increase should average about 97%.

Both figures are lower than the national average because of California’s relatively younger and healthier population, as well as a rate review process that takes place each year in the state and a minimum of two carrier choices for all enrollees, according to Covered California..

But the 60-year-olds with the $85,000 income are above the ACA subsidy limit for those at 400% of the federal poverty level. Overall, KFF found, in the eight Sacramento area and Central Valley congressional districts, premium increases for the that couple would rank in the top half of percentage increases, with the highest projected premium jump in those districts coming in Rep. Adam Gray’s Merced-based district.

Only in California’s 21st congressional district, which includes Fresno and surrounding areas, and the 22nd district, which includes Bakersfield and Hanford, would the cost increase rank much lower nationally than other districts. Both, though, are still due for increases in the top half of the 435 congressional districts nationwide.

Health care in rural areas can be more expensive due to a lack of competition among providers and carriers.

“Higher health insurance premiums largely reflect the higher underlying costs for health care services in a particular region,” said Kristof Stremikis, director of market analysis and insight for California Health Care Foundation, a nonpartisan health care advocacy group. “The biggest factor driving those underlying costs these days are the prices that insurers are paying for things like hospital stays, doctor visits, and prescription drugs on behalf of enrollees.”

The fight over continuing the subsidies is a major flashpoint in the battle over whether to reopen the federal government. Democrats insist on continuing the enhanced subsidies. Republican leaders say they’ll discuss any proposals once the government reopens. Democrats counter that they won’t back a reopening until the continuing subsidies are in place.

The two sides remain deadlocked, and Monday, the shutdown entered its 20th day with no obvious end in sight.

What could a 60-year-old couple pay next year?

Because the subsidies were seen as short-term relief to ease the economic upheaval from the pandemic, they are set to expire at the end of this year.

The credits can be used by those whose incomes fall under certain amounts. KFF evaluated the projected premium increases for a couple, aged 60, with an income of $85,000 annually buying the “silver plan,” a moderately priced alternative.

The current annual premium, regardless of district, is $602 annually for those getting the subsidies. Here are KFF’s estimates about what could happen in some Northern California and Central Valley districts if the enhanced subsidies expire:

•3rd congressional district, Rep. Kevin Kiley, R-Roseville, Eastern Sacramento suburbs, parts of El Dorado and Inyo counties. Projected premium: $3,173, a 427% increase. National rank: 23.

•4th congressional district.Rep. Mike Thompson, D-St. Helena. Lake and Napa counties, plus most of Yolo County. Projected premium: $2,952, up 390%. National rank: 51.

•5th congressional district. Rep. Tom McClintock, R-Elk Grove. Northern San Joaquin Valley, including parts of El Dorado, Stanislaus, Madera and Fresno counties. Projected premium: $2,841, up 372%. National rank: 71.

•6th congressional district.Rep. Ami Bera, D-Sacramento. Sacramento area. Projected premium: $2,910.15, up 357%. National rank: 57.

•7th congressional district. Rep. Doris Matsui, D-Sacramento. Sacramento area. Projected premium: $2,910.14, up 357%. National rank: 58.

•13th congressional district. Represented by Gray. Merced County and other parts of the San Joaquin Valley. Projected premium: $3,195, up 431%. Rank: 22.

•21st congressional district. Rep. Jim Costa, D-Fresno. Fresno and Tulare counties. Projected premium, $2,424, up 303%. National rank: 204.

•22nd congressional district. Rep. David Valadao, R-Hanford. Parts of Kings, Tulare and Kern counties. Projected premium: $2,412, up 301%, National rank 211.

National highest and lowest premium increases

Nationwide, the biggest projected increases for the 60-year-old couple are likely in Wyoming, where premiums could jump by 693%, and West Virginia, where increases of 599% to 654% are forecast.

Topping the California list for that couple is the First District, represented by Rep. Doug LaMalfa, R-Chico, where premiums are expected to increase 502%, the sixth-highest jump in the nation.

The smallest projected increase in the state for the couple is predicted in the Los Angeles-area 44th district, represented by Democrat Nanette Barragán, where a 228% increase – ranked 363th in the nation – is expected.

New York districts tend to have the smallest anticipated increases, as the state uses a community rating process, meaning people who use the same plan get the same premium, regardless of age or other factors.

The fight over whether to maintain the credits has been driven by Democrats, who are insisting on an extension before they agree to vote to reopen the government.

They have some GOP support for the idea: Valadao, for example, backs a one-year extension; Kiley has also been sympathetic to an extension, though House Minority Leader Hakeem Jeffries, D-New York, has said that’s unacceptable.

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