Do you remember that this past December, Congress passed a major tax reform bill last year? (No? So much has happened except for actual legislation.)

A major health policy change was that the individual mandate to have health insurance (a key feature of the Affordable Care Act) was ended – for this year, if you don’t want to or can’t buy/otherwise sign up for health insurance, you no longer have to pay a penalty on your taxes in April 2019.

Without this penalty, younger, healthier people are less likely to sign up, leaving older and sicker people still shopping for health insurance. To deal with a smaller pool of people who likely have more health care costs, insurance companies will be charging more…which is what we are seeing.

Maryland insurers are requesting an average 30% increase in premiums for 2019. Meaning if you have insurance that currently charges you $800/month, you would have to pay $1040/month next year.

But this is just an average- if you look at specific plans, CareFirst is requesting 91% and 64% increases for PPO plans in Maryland and Virginia.

Insurers have not started sending notices in California yet, but our own insurance marketplace may see increases around 18% this year and 35% in three years.

What does this mean for disparities?

Unclear- for lower-income individuals, they will still have subsidies from the federal government so this group may see no effective change in the cost of insurance.  Those with higher incomes will see the real pain, and they may decide not to buy insurance on the marketplaces. In California, the “higher income” people are not necessarily well– for those living in the very expensive Bay Area, insurance may be too costly because all of your money has to go towards rent.

In the long run, an even bigger concern is that as the pool gets smaller and sicker, insurance companies will drop out and not offer coverage at all. (This is so terrifically named the “death spiral.”) This may hit rural communities first, because they already have fewer choices for healthcare providers and insurance.