Covered California proposes 13 percent premium increase

Covered California announced projected average rate increases of 13.2 percent for health insurance bought next year through the state-run system, as consumers were urged to “shop around” to avoid large premium hikes.

“Even though the average rate increase is larger this year than the last two years, the three-year average increase is 7 percent — substantially better than rate trends before the Affordable Care Act was enacted, ” says Mr. Lee.

Covered California, the state’s Obamacare exchange, said that the higher rate hikes are “directly linked” to the higher health-care costs being borne by insures, and not to administration costs or profit.

The announcement comes as major insurers around the country seek even bigger rate increases for open enrollment this fall, and the presidential candidates clash over the future of President Barack Obama’s landmark health law. But that protection expires this year, adding a four to seven percent increase to consumers’ monthly premiums in 2017, according to an analysis of the American Academy of Actuaries.

But he also says consumers may see a smaller increase or pay less for insurance if they switch to a new plan.

California tends to see wide variation in rates across the state. More people were expected to use the exchange than actually did.

Rate hikes will vary depending on the region and the carrier.

In May, the Centers for Disease Control and Prevention announced that California’s uninsured rate had fallen to 8.1 percent at the end of 2015, down from 17 percent at the end of 2013, right before the Affordable Care Act began offering coverage. Provisions of the law that help insurers absorb the uncertainties are also expiring.

A year ago, Lee wrote an op-ed in The Times saying that Covered California’s power in negotiating with insurers was allowing Obamacare to work in the state. The healthcare.gov federal exchange provides insurance under the Affordable Care Act in 38 states.

“We’re looking across the board to make sure everybody plays by the rules”, Lee said. “The good thing about the Affordable Care Act is customers are not locked out because of a pre-existing condition”.

“Covered California does not negotiate by table-pounding, but rather by providing good data on the risk mix of who is enrolled and working the health plans to garner maximum enrollment”, Lee said in his remarks before Congress.

“In 2017, Covered California prices are influenced by higher spending on medical care, particularly skyrocketing prices on specialty drugs, and the sunset of two federal programs”, said California Association of Health Plans President & CEO Charles Bacchi.

But that positive effect may be wearing off as people get sick over time or leave the individual market for coverage elsewhere, experts say. “What was the best deal last year may not be the best deal this year”, Wright said.