The state of California has something called safety net insurance for those residents who want health care coverage but have issues accessing it on the open market. This coverage is not cheap and usually those that have pre-existing medical issues or unemployed have this type of coverage. It takes effect after people have lost their COBRA benefits. Most employees after being laid off or fired get these benefits for eighteen months. After this time period, many opt for the state run program to stay insured.

Approximately twenty thousand people are insured by this state run program. It is very costly and people pay between seventeen thousand and twenty five thousand per year for their coverage. These amounts are very high and will go up because the state has approved rate increases. Two of the insurance companies that participate in the state’s safety net program are Anthem Blue Cross and Blue Shield of California. When asked by the state to come up with insurance rates they each have differing formulas and results which caused problems.

Both companies have been known to have extremely high rates and have at times exceeded the state’s cap. Recently, a Los Angeles man was awarded seven thousand dollars in a lawsuit against Anthem Blue Cross due to this. The state of California had to step in and have an actuary go over the calculations and formulas that were submitted to the state. Now there is a new formula to calculate the rates and the state has said that the rates will have increases that occur over time and will be fair.

Many California residents feel slighted and taken advantage of by this increase. Some have said that California is very deep and debt and is looking for ways to make money even if that means its residents have to suffer financially. The Department of Managed Health Care has stated that the rate increases are necessary due to bad premium calculations. Because the premiums were not calculated the proper way in the past, the rate hikes need to compensate for the mistakes.

Those with these health care policies have stated that they feel like they are being punished for the state’s mistakes. Now as a consequence from these rate hikes many people will have to drop their coverage. The economy in California is not very good and many people are struggling to make ends meet. There is not a lot of job growth in the state and people have had a hard time staying insured. If more people continue to have to drop their coverage based on economic reasons then the health of the state will decline.

Hopefully, the formulas and calculations that the actuary has put forth will not be too tough on the wallets of California residents. Health insurance policy rates are astronomical right now and the safety net coverage program is the last hope for many people. More oversight needs to be involved so that consumers are not so affected by premium rate increases in the future.

Source: Los Angeles Times