Analysts Say Covered California Premium Increases Unlikely

Health care analysts say that 2015 premiums for plans sold through Covered California are unlikely to significantly increase, the Orange County Register reports. The state insurance exchange is slated to release new premium rates and other policy details on Thursday.

Background

The exchange's next open enrollment period will begin Nov.15 and run until Feb. 15, 2015.

Covered California will aim to garner new enrollees while renewing coverage for many of the 1.4 million individuals who signed up during the first open enrollment period.

Insurers' Comments

Most of the insurers participating in California's health insurance exchange have indicated that their current premiums are on target for the number of enrollees they signed up during the first open enrollment period, according to the Register.

Blue Shield of California spokesperson Mia Campitelli said the insurer "was pleased with the larger-than-expected enrollment numbers, signaling strong enrollment by healthy individuals."

In addition, Anthem Blue Cross President Mark Morgan said the average age of the insurer's enrollees was 41 years old, adding, "So our team got it right in terms of setting that pricing based on age."

Morgan said Anthem "will not have double-digit increases" for rates on its Covered California plans.

Meanwhile, John Nelson, spokesperson for Kaiser Permanente's Southern California region, said that insurer is "optimistic that consumers will see at most only very modest increases, if any, next year."

Analysts Expect Rates To Remain Steady

Analysts say the insurers' comments indicate that there will be only small increases in premiums for consumers enrolled in plans through the exchange.

Larry Levitt, a senior vice president at the Kaiser Family Foundation, said he expects rate increases in the state to be "on the modest end of the spectrum."

Levitt said the rates likely will remain steady because California refused to allow plans that did not comply with the ACA to be offered.

In addition, he noted that the state exchange experienced enrollment that was more than twice as high as expected. Levitt said enrollment in California's insurance exchange "has been strong, so the risk pool is likely to include healthy people as well as sick," which will help keep rates low.

Ron Goldstein -- CEO of CaliforniaChoice, an Orange-based private insurance exchange for small businesses -- said insurers also will be working to keep new enrollees while they pay off costs for upgrading their systems to comply with the ACA. Goldstein said that "it would not make sense to increase premiums very much."

However, observers say that there could be wide variation in premium changes for the coming year as insurers rely on assumptions, computer models and other strategies to set rates, and those techniques could differ by insurer (Wolfson, Orange County Register, 7/28).