Covered California 2016 Premiums Will Increase by an Average of 4%
On Monday, Covered California officials announced that the average premium for health plans offered on the exchange will increase by an average of 4% next year, the Los Angeles Times reports (Terhune, Los Angeles Times, 7/27).
Actual rates are pending review by state regulators, but consumers can view preliminary plans on the exchange starting next week (Robertson, Sacramento Business Journal, 7/27). The rates now will undergo a 60-day public comment period.
The exchange's next open enrollment period will begin Nov. 1 and run through Jan. 31, 2016 (O'Neill, "KPCC News," KPCC, 7/27).
Details of Rates
The average increase for 2016 is down slightly from the 4.2% hike in 2015 (Lin, AP/Sacramento Bee, 7/27).
Covered California Executive Director Peter Lee said, "We now have three years of history showing that bringing focus on consumers and negotiating with health plans can lower premiums" ("KPCC News," KPCC, 7/27).
According to the Times, about 20% of enrollees are set for a rate decrease. Lee said the premiums are about $200 million lower than what insurers originally sought.
Still, about 2% of enrollees could see rate hikes of more than 15% if they do not switch plans (Los Angeles Times, 7/27).
Overall, premium changes in California will range from a 10% decrease to a 23% increase, according to Larry Levitt, with the Kaiser Family Foundation (AP/Sacramento Bee, 7/27).
According to the exchange, consumers who shop around and switch to the lowest-cost plan on their tier could decrease their premiums by an average of 4.5% (Los Angeles Times, 7/27).
According to the AP/Bee, the rates vary depending on region. For example:
- Southern California will see an average rate increase of 1.8%; and
- Northern California will see an average increase of 7%.
The average rate in Southern California is lower because of more provider competition, according to the AP/Bee (AP/Sacramento Bee, 7/27).
The rates also differ among the state's insurance pricing regions. For example, the region that includes Monterey, San Benito and Santa Cruz counties will see the largest average increase at 12.8%, while five Central Valley counties will see a 9.8% average increase (Sacramento Business Journal, 7/27).
Covered California has added two new insurers to the exchange. Twelve insurers in total will participate in 2016:
- Anthem Blue Cross;
- Blue Shield of California;
- Chinese Community Health Plan;
- Health Net;
- Kaiser Permanente;
- L.A. Care Health Plan;
- Molina Healthcare;
- Oscar Health Plan of California;
- Sharp Health Plan;
- UnitedHealthcare Benefits Plan of California;
- Valley Health Plan; and
- Western Health Advantage.
According to Covered California, UnitedHealthcare will not sell plans in Southern California. Meanwhile, Oscar will only offer coverage in Orange County and parts of Los Angeles County ("KPCC News," KPCC, 7/27).
Lee said the insurers, which both have stressed the importance of technology, were added because they had strong networks that are good for consumers (Aliferis/Dembosky, "State of Health," KQED, 7/27).
Consumer groups and health advocates applauded the rate increase announcement.
Betsy Imholz of Consumers Union said that "this relatively small jump means California made sound decisions in establishing the structure and powers of the exchange and requirement that all plans meet Affordable Care Act standards" (AP/Sacramento Bee, 7/27).
Meanwhile, Levitt said, "This shows what a stable, competitive individual insurance market can look like" ("State of Health," KQED, 7/27).
However, Robert Laszewski, a health care consultant in Virginia, said that California officials seemed to be keeping rates low just to boost enrollment. He said, "Tough regulation can put off the real costs, but it can't do it forever," adding, "This is all too fragile if rates popped" (Los Angeles Times, 7/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.