SAN DIEGO (KGTV) — The expiration and change of Affordable Care Act subsidies could create significant financial challenges for Southern California residents, with most people already facing an average of 10% increase in premiums this coming year, according to the California Healthcare Foundation.
The timing couldn't be worse, as healthcare costs continue to rise across the board. Insurance companies are paying more to provide care and passing those costs directly to consumers– a trend that intensified during the COVID era.
"Premium increases this year are particularly bad," said Christoph Stremikis, a healthcare policy expert with California Healthcare Foundation said.
The impact of disappearing federal subsidies varies dramatically based on individual income levels, creating a complex landscape for consumers trying to navigate their healthcare options. Those impacted the most will likely take part in Covered California, the state marketplace for healthcare, partially funded by federal subsidies.
However, California has stepped in with some relief measures. The state released funds to help maintain similar costs for Covered California plans, specifically targeting the most vulnerable populations - those making150% of the federal poverty line.
People earning up to twice the federal poverty line remain eligible for low-cost plan options through the state program.
Those hit hardest are individuals and families earning above 400% of the federal poverty line. The California Health Foundation estimates that some couples will now pay one-third of their income toward healthcare costs, depending on many factors.
Covered California suggests that premium increases may be less severe for consumers willing to shop around and explore different insurance options, regardless of their provider.
In San Diego County specifically, costs were projected to increase by 11%, but consumers who compare plans could potentially limit increases to just 3%.
State officials acknowledge this isn't a complete solution to the underlying problem. The disappearing subsidies leave a substantial gap in the healthcare system that individual citizens will ultimately need to cover through higher out-of-pocket costs.
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