California is expected to weather federal changes to health insurance rules better than many other states, but it will still face declining enrollment and rising premiums, two new studies predict.

A Harvard-led survey of Californians who buy health insurance on the individual marketplace found that one in five would likely drop their coverage once they no longer face a tax penalty for being uninsured.

The penalty, also known as the “individual mandate,” will disappear in 2019 as part of changes in the tax bill adopted by Congress late last year. That could result in almost 400,000 people who currently purchase health insurance on their own forgoing insurance, the study found. That includes people who buy health insurance on the state exchange, Covered California.

“Obviously, that’s moving in the wrong direction,” said lead study author John Hsu, an associate professor of health care policy at Harvard Medical School. “We’d ideally like to see more people insured and have the financial protection of having health insurance.”

The decline in the number of people insured will likely lead to premium increases, both in California and across the nation, another study released by Covered California last week predicted. That’s largely because healthier people will be more inclined to drop their insurance if they don’t face a penalty, while sicker people would stay enrolled, experts said. Some states could see as much as a 90 percent increase in premiums between 2019 and 2021, the analysis indicated.

California is expected to do a better job of reigning in insurance price increases, the study estimated, but the cumulative premium hikes could still be around 35 percent above current rates. Covered California Executive Director Peter Lee predicted premiums could rise by 12 to 16 percent in 2019 alone.

“Increases at this level are bad news for consumers,” he said in a statement. “But Californians …read more

Source:: The Mercury News – Health


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