CHAMPAIGN — When Caron Barnhart saw how much her insurance through Health Alliance Medical Plans would cost next year, she had to double-check to see if it could be right.
Her monthly premium on an individual health plan covering just herself, now $279, would increase to $700.
Plus, she said, she learned her annual deductible would be rising along with the premium — from $1,500 to $2,000 — on in-network health care.
A 64-year-old sorority house director, Barnhart sent Health Alliance an e-mail to make sure she had the right rate, and sure enough, she said, "it was just what I figured."
Barnhart and others who buy their own health coverage are seeing increases for next year to help pay for new taxes and other expenses built into the Affordable Care Act.
The new costs are turning up in next year's insurance premiums to help offset the cost of covering millions of people who haven't had insurance before and to help foot the bill for such things as new mandatory benefits for all and other new regulations.
Some details that will affect premiums next year for people buying coverage on their own, according to America's Health Insurance Plans, a trade group representing health insurers:
— A number of new taxes and fees, among them a health insurance premium tax that will cost $8 billion in 2014 and grow annually, and a new user fee for health plans operating in the federal marketplace.
— New coverage: Starting Jan. 1, 2014, all health plans must include 10 essential health benefits that will make health coverage both more comprehensive and costly.
All policies sold in both the private market and in the state-federal marketplace must include maternity care, hospitalization, laboratory services, prescription drugs, ambulatory patient services, emergency services, prevention and wellness, mental and behavioral health, pediatric services and rehabilitative services.
— New regulations starting Jan. 1 that include an end to exclusions for pre-existing conditions for adults (exclusions for children are already prohibited) and an end to rate differences for gender and health status. Insurers in states (including Illinois) that now allow premium rates to vary as much as five times more for older people than younger people will be limited to a three-to-one variation.
More than double
Danville insurance agent Jim Moore said there are five new Affordable Care Act taxes adding up to a 7 percent increase in premiums.
And with all the new regulations and guidelines, he said, insurers "don't know what their claims are going to be."
Moore, 61, got hit with rate shock along with some of his own clients.
He learned his premium rates for himself and his wife on a Health Alliance high-deductible plan would jump from $560 to $1,422 a month come Jan. 1, 2014, he said.
Moore said he can't afford to renew at that rate. But he also earns about $800 a year too much to be eligible for a government subsidy to knock down the cost of marketplace health plan premium.
Many of his clients are in the same situation, he said — facing unaffordable premium increases, but also ineligible for a government premium subsidy on a government marketplace plan. He predicted some will be forced to go uninsured and pay the penalty next year.
"I don't blame the insurance companies," he said. "I blame the administration for doing this without more research."
The penalty for failing to have health coverage increases annually and will be calculated one of two ways based on whichever is greater:
— 1 percent of your annual income, with the maximum being the annual cost of carrying a bronze health plan in the government marketplace.
— $95 per adult and $47.50 per child in the household, with the maximum family penalty being $285.
Pay the penalty?
Barnhart said she has tried to check her own insurance options in the government marketplace to see if she qualifies for subsidized coverage, but she can't get past entering her name and password on the federal website.
"I'm so frustrated with the whole thing," she said.
What she'll do, she doesn't know. Since she's in good health, she said, it might wind up being easier for her to pass on the insurance and pay the penalty.
"I'd rather everything be what it is right now, prior to Jan. 1 when everything is supposed to change, because I don't see how it's going to make things better for so many people," Barnhart said.
Health Alliance spokeswoman Jane Hayes said keeping insurance affordable and accessible is both a goal and challenge for the company.
"There are a number of factors created by the Affordable Care Act influencing premiums for 2014 — mandatory added coverage that some people have chosen not to purchase in the past, like maternity coverage and prescription drug coverage; added insurance risk that comes with the unknown health costs of applicants when all must be accepted; age rating band compression, which means younger people subsidize more of the cost of older people," she said in an e-mail.
More factors she lists: New taxes and fees, with the health insurance tax alone projected to run $5 billion in Illinois over the next decade, an average of $500 million a year.
The Affordable Care Act also includes protections for insurers that the company hopes will help offset any extremely high claims costs, Hayes said. But the impact of those programs won't be felt until 2015, when Health Alliance reports its 2014 costs and the federal government determines whether the company is eligible for more money, she said.
Meanwhile, Hayes also said, "We're working very hard to keep administrative costs down so we're not adding unnecessary costs to health insurance premiums. That, along with negotiating the best possible discounts with our health care providers and offering programs and coverage that help people improve and maintain their health are the best we can do to keep premiums affordable."
'Like ... living on public aid'
But retired nurse Louann Meier, 59, of Urbana, will need to turn elsewhere for coverage, she said.
Her own Health Alliance health plan premium is going up from $258 to $800 a month, so she has tried — unsuccessfully — to see if there might be affordable coverage in the government marketplace, she said.
Problems with the federal website have kept her from getting very far in that process. She finally had to mail an application to the government, and now she's waiting on a response with a Dec. 15 deadline looming to cancel her Health Alliance plan, she said.
Meier said her income places her in the range for a premium subsidy — though she doesn't know how much it would be.
But she expresses distaste for a system that forces her to accept coverage for care, such as maternity — that she doesn't need at her age — and leaves her turning to the government to help pay for it.
"I'm going to feel now like I'm going to be living on public aid," Meier said. "I didn't want help from the government. I wanted to pay my own bills."