CHA News Article

Covered California Looks Ahead to 2019

This week, Covered California shared its latest open enrollment data, showing that more than 220,000 new consumers signed up for coverage through Dec. 15 — about 10 percent more than last year. In addition, approximately 1.2 million existing Covered California consumers have had their coverage renewed for 2018. While the open enrollment period has ended in most states, uninsured consumers in California have until midnight tonight to sign up for coverage beginning on Jan. 1.

With the continued health care policy debate at the federal level, Covered California also noted that the individual market faces significant uncertainty in 2019. According to Covered California, the three main causes of this uncertainty are repeal of the individual mandate penalty, lack of federal marketing and the president’s recent executive order allowing the sale of “association health plans” or “short-term plans.” 

Covered California estimates that, without federal action to offset the destabilizing effects of these issues, between 10 and 20 states could be left without any carriers in their exchanges in 2019 and that consumers in the remaining exchanges could also face dramatically higher premiums, particularly those who do not receive any financial assistance.

During its Dec. 7 board meeting, Covered California discussed several federal policies that could stabilize individual markets across the country, including implementing state-based risk stabilization programs such as reinsurance or invisible high-risk pools, a federal commitment to marketing, restoration of cost-sharing reduction funding, and removal of the health insurance tax. This week, Covered California released an analysis noting that one of the best routes to provide some certainty and stability to carriers and to lower premiums for consumers is to provide adequate federal funding for invisible high-risk pools or reinsurance. 

The analysis describes the cost to the federal government, the impacts on premiums and the mechanics that would be involved if stability funding is provided to carriers. It demonstrates that a federal reinsurance program funded at “net” federal spending of $5 billion annually would reduce premiums on average 10 to 12 percent, driving down federal spending on tax subsidies and supporting a total risk stabilization fund of $12 billion. Additionally, Covered California offers comments on administration of the proposed risk stabilization programs, apportionment of funds across states and the importance of maintaining a single risk pool if states opt to administer state-based invisible high-risk pools.