Tom Schrette and Alan Cash

Tom Schrette and Alan Cash

J.L. Sousa

Dear Tom and Alan:

My son has a health plan through Covered California with a premium subsidy.

His premium went way up (guess who pays)! Why? What is the outlook for 2017 with the new administration?

I know it’s a loaded question but any hint would be interesting.

Pondering the Future

Tom: The big question is, “Will the subsidy remain?”

If you were one of the more than 2 million Californians enrolling through Covered California, you were in line to receive help in paying your monthly premium as long as your income was between 1.5 and 4 times the federal poverty level.

The reason this is such a big question is because California, way back when, decided not to participate in the Federal Health Exchange and opened their own … with billions and billions of federal dollars.

These federal dollars go away in 2017. My concern: does the California Legislature remember this?

Al: In the January, 2017 “California Broker” magazine, Michael Lujan writes that “…Trumpcare ultimately looks a lot like Obamacare.

Remember, Obamacare was originally modeled after RomneyCare in Massachusetts…” Lujan also points out that Trump at one time praised the single-payer system like they have in Scotland and Canada.

However, the costs are daunting whether keeping or dismantling. Tennessee had increases up to 115 percent. In our office, 35 percent increases were not at all unusual. Lujan’s summary:

“Health care affordability is on an unsustainable trajectory for too many Americans. Whether it’s solved by tweaking the ACA (Affordable Care Act) or a complete overhaul, it will be a tough couple of years as no fix will have an immediate impact. The new administration must address the underlying cost of healthcare which makes health insurance unaffordable.”

Tom: It seems almost archaic that just over four years ago a person could be declined health insurance because of pre-existing conditions.

Now there is no medical underwriting, which could lead to a refusal of coverage. Under the ACA, the only way someone is declined is if they apply outside of the open enrollment period or if their paperwork gets “lost.”

Al: Don’t get me started on that one.

Tom: OK. When the whole concept of the “marketplace” began, some insurers under-valued the premiums they charged in order to gain market share.

The masses of enrollees and premiums associated with the flood of new insured were thought to offset the claims risk of any pre-existing medical conditions.

Well, the flood didn’t happen. The young and healthy consumers did not join the exchanges as predicted.

About two-thirds of health insurers were not profitable the first year of Obamacare. Some have pulled out and will not participate.

The Covered California website states that the state expects approximately 33 percent of current members to disenroll for reasons of employment, income or rising health insurance prices.

Al: A big concern for us is the lack of medical providers in our area.

Submit questions or reach the Health Insurance Guys at Schrette Insurance, 1556 First St., Suite 105, Napa, 94559; 255-9511;; or