2019 Predictions for Health Care in California

Posted: May 24, 2018

HealthforCalifornia.com Evaluates Obamacare, the Trump Agenda and the Push for Single Payer

2018 Open Enrollment was interesting. Anthem Blue Cross dropped out of 19 regions. Many of their members switched to Blue Shield. Enrollment on Blue Shield’s Trio product skyrocketed. Molina’s rates went up and market share went down. And, carriers like Health Net and Oscar continued to gain membership.

Also, the federal government stopped paying for Cost Sharing Reduction. Covered California countered by raising the rates on Silver Plans. This caused awkwardness in the market where Silver Plans were often around the same price as Gold Plans. Sometimes Gold Plans were even cheaper.

In addition, this anomaly was only for on-exchange. So Silver Plans off exchange were actually cheaper than those through Covered California, especially those without subsidies. This caused some people to leave the health exchange in California and go direct with the carriers to get lower prices on the Silver Plans.

But what about next year?

It’s difficult so say because President Trump has been on such a rampage to make changes to health care. He’ll put out a message on Twitter, and send the markets reeling.

Trump was unable to overturn Obamacare, but he seems bent on undermining it. Since the ACA is a system that was already tottering, it’s not beyond reason that the President may be able to undermine it to the point where it collapses like a house of cards. Will that happen in 2019? Likely not, but we may see the foundations begin to crack.

Trump stopped funding CSR’s. He sought to repeal Obamacare. Then, he declared that the penalty was no longer in effect and sent confusion into the market.

No More Penalty in 2019

Ultimately, the penalty remained for 2018, but then Trump started working on tax reform. As part of tax reform, Congress outlawed the penalty. And, we don’t know what that is going to do to health care in America.

Experts guess that 0-20% of California individual and family enrollees may end up cancelling their coverage once there is no penalty. Just on the news alone that the penalty would go away, “The market may have lost 1-5%,” said Jeff Smith, Blue Shield of California Vice President of IFP Sales. “Likely we’re going to see decreases in the upper single digits.”

Decreases like this will not instantly destroy the individual and family market, but in the long run they could destroy it or severely disable it.

Removing the penalty starts a cycle that is hard to stop. Healthy people drop out of the pool. Rates go up. More healthy people drop out. Rates go up even more. Etcetera.

The Coming Silver Surge

In 2018, we had what Peter Lee, Executive Director of Covered California, called the “Gold Rush”. Because Silver Plan prices were so high, many flocked to gold plans.

But this won’t be the case in 2019, so we may see the reverse happen. We may have a “Silver Surge” as people on gold plans realize that in the next year they can now save a lot of money by switching to Silver Plans.

The Bottom Line

In 2019, you’ll continue to see a move away from PPO’s and toward HMO’s. Kaiser Permanente will continue to gain market share. Blue Shield will continue to transition more of its membership to their Trio products. And, other carriers will continue to move more of their membership to HMO’s.

Also, you’ll see the federal government continue to try to undermine Obamacare, while in California you’ll see a liberal legislature fighting for single payer. All this rhetoric could create a lot of excitement next year!

However, the big changes aren’t going to happen in 2019. Obamacare will persist. The market will remain fairly stable. But 2019 could set the market up for future disaster if liberals and conservatives can’t figure out a unified path forward related to health care in California and America.