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Health premiums would leap for many Californians under GOP plan

Health premiums to rise under GOP plan to replace Obamacare
Insurance agents help sign people up for insurance through the Covered California exchange at a storefront in Huntington Beach.
(Nick Agro / Associated Press)

Health insurance premiums would leap substantially for many Californians, especially lower-income people living in high-cost cities, under the House Republican plan to replace Obamacare, according to an analysis released Tuesday.

Californians purchasing insurance through the state’s Obamacare program known as Covered California received $4.2 billion in subsidies in 2016 to help them buy coverage.

By 2020, the average subsidy would be only 60% of what is provided under the current law if the Republican plan becomes law, according to a preliminary analysis by officials at the state insurance exchange.

The decline would especially hurt those living in San Francisco and other cities in Northern California, where healthcare is more expensive, according to the report.

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For example, in Los Angeles, a 62-year-old earning $30,000 a year would see her net premium increase from $207 a month under the current law to $275 a month under the proposed law. If that person lived in San Francisco, however, the monthly premium would leap threefold, from $209 to $668.

Peter Lee, executive director of Covered California, said healthcare costs 30% to 40% more in Northern California compared with the southern half of the state, where there is more competition between doctors, hospitals and clinics.

The current law known as the Affordable Care Act helps people cover those more expensive premiums by giving them bigger subsidies. About 12% of families signing up for insurance on the state exchange now receive more than $10,000 in annual subsidies, the analysis found.

That would change under the proposed law, which would provide subsidies based primarily on a person’s age. By comparison, the current law distributes the subsidies based on age, income, family size and the cost of insurance where they live.

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“They are not taking that money home,” Lee said. “Without a subsidy of $10,000, they would not be able to afford coverage. … Healthcare is expensive in America.”

Some older Californians who don’t now qualify for subsidies because their income is too high would get help under the proposed law. For example, a 62-year-old making $50,000 would get $4,000 to pay for coverage.

The current law cuts off subsidies when a person’s income is above $47,000, which is 400% of the federal poverty level.

A report by the nonpartisan Congressional Budget Office estimated Monday that the GOP legislation would result in 24 million fewer Americans having coverage over the next decade.

In California, the Affordable Care Act and an expansion of the Medicaid program, which covers the poor, has helped reduce the rate of those without health insurance from 16% in 2010 to 7.1% today.

melody.petersen@latimes.com

Follow @melodypetersen on Twitter

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