Health insurance in California saw three major changes in 2017. First, PPO plans were phased out in favor of HMO and EPO plans. Second, all Obamacare enrollees had to choose or be recommended to a PCP. Third, most plan premiums increased in price.
Because California has the nation’s largest state-run health insurance exchange, its pool of about 1.4 million enrollees helped insurance companies avoid setting exorbitant premium rates since its inception in 2014. However, in 2016, the exchange (called Covered California) announced that premiums would increase by 13.2% in 2017. This double-digit figure is less than the 22% average increase nationwide, but it’s still a significant spike!
Covered California’s premium increases are mostly due to the federal “reinsurance” program that expired in 2016. This protection paid insurers extra when they had a high proportion of very sick patients who enrolled in minimal-coverage plans but still needed costly medical care and prescription drugs. In 2017, insurers will cover those costs by charging you higher premiums.
While these price increases will certainly impact 2017 enrollment, they coincide with another major change: a shift toward managed care.
What Is Managed Care?
Managed care plans are types of health insurance that contract with healthcare providers and facilities to provide care at reduced prices. Technically, PPO, HMO, EPO, and POS plans are all considered “managed care” plans. However, HMOs more closely align with a managed-care approach because your need for medical attention is evaluated by your primary care physician (PCP) before you seek specialized care.
“California has definitely, relative to the nation as a whole, been far more aggressive in moving into managed care,” said Dr. Geoffrey Joyce, director of health policy at the University of Southern California’s Schaeffer Center, to KQED News.
We gave you a summary of the four different plan types, but here’s a quick review:
HMOs limit your access to care. You must have a PCP referral, and you must see a healthcare provider within your network. PPOs give you more flexibility. You don’t need a referral, and you typically have a larger network of doctors to choose from.
EPOs don’t require a PCP referral, but they don’t provide out-of-network coverage. POS plans require a PCP referral, and they provide some out-of-network coverage.
Each year, more PPOs are converted to HMO and EPO plans. By 2018, it’s likely that California insurers simply won’t offer PPO plans. The transition toward HMO and EPO plans is explained by their limited network sizes: insurance companies can keep costs in check when they have more control of when and where patients seek treatment.
Can You Avoid Paying More In 2017?
The changes in plan types and premium rates will affect most insured Californians in 2017. However, you can take three steps to minimize costs and still keep the coverage you need.
1. Double-Check Your Provider Coverage
Before you renew or change your plan, call your insurance carrier. If you enrolled in a plan through Regency West, or if you want to sign up for a new plan, visit our website or call us at (858) 699-0286.
And before you see a doctor, call your insurance carrier to verify coverage. Your plan’s insurance carrier will tell you if the doctors, hospitals, or providers you want to use are included in your plan’s network.
For whatever plan you choose, it’s crucial that you double-check that your PCP (or any provider you visit) accepts your plan before you seek medical care. Otherwise, you could pay much more — possibly 100% of medical costs — for going out-of-network.
2. Shop Around For Lower-Priced Plans
Are you renewing the same plan because it’s the best plan for your needs, or simply because it’s easier to stick with what you have?
As we said before, monthly premiums will be an average of 13.2% higher next year. Blue Shield and Anthem Blue Cross will see the steepest increases: about 19% and 16%, respectively. However, not all insurers will have the same spike in premiums. Sharp Health Plan, for instance, will increase rates by 4.7% in 2017. Plus, individual plans offered by the same insurance carrier will also have varied prices. For example, insurance carriers’ HMO and EPO plans are typically cheaper than their PPO plans.
“Almost 80 percent of our customers could either pay less than they are paying today or pay no more than [a] 5 percent increase,” said Peter Lee, the executive director of Covered California.
Think of next year’s changes as motivation to reevaluate your current coverage. By comparing plans from multiple insurance carriers, you might find a cheaper version of the plan you want.
3. Find Out If You Qualify For Financial Assistance
If you enroll in health insurance through Covered California, and you meet a certain income level, you could qualify for a federal subsidy.
According to Gerald Kominski, a professor of health policy at UCLA, 85% of people who enroll in their state or federal exchanges can pay a discounted rate for coverage because they qualify for a plan that is partially subsidized by the government.
Enroll In A Plan For 2017
Whether you’re a first-time enrollee, or you just want to compare plan options, it’s easy to get covered in 2017. Just talk to an agent at Regency West Insurance. Regency West represents all insurance carriers on the California market. Plus, help from our group of licensed agents is 100% free!
To enroll in a plan, visit our website to schedule a free consultation, or call us at (858) 699-0286. You’ll be put in touch with a friendly, license agent who will help you find a plan suits your budget and health needs.