Covered California’s premiums jumped 13.2% for 2017, up from about a 4% increase in each of the past two years. However, most consumers will see a much smaller increase or pay less next year if they switch to another plan. California executive director Peter Lee said, “Shopping will be more important this year…Almost 80% of our consumers will be able to pay less than they are paying now, or see their rates go up by no more than 5% if they shop and buy the lowest-cost plan at their same benefit level.”
While premiums will rise, the subsidies will rise as well. About 90% of Covered California enrollees get help to pay for their premiums. The average subsidy covers roughly 77% of the consumer’s monthly premium. “Even though the average rate increase is larger this year than the Past two years, the three-year average increase is 7% – substantially better than rate trends before the Affordable Care Act was enacted,” Lee said.
Covered CaliforniaPremium increases | 2014-2015 | 2015-2016 | 2016-2017 | 3-year average |
Average weighted increase | 4.2% | 4% | 13.2% | 7% |
Lowest price Bronze plan | 4.4% | 3.3% | 3.9% | 3.9% |
Lowest priced Silver plan | 4.8% | 1.5% | 8.1% | 4.8% |
Second lowest priced Silver plan | 2.6% | 1.8% | 8.1% | 4.1% |
If a consumer switches to the lowest priced plan in the same tier | – | -4.5% | -1.2% | – |
Lee said the average rate increase reflects the following factors:
- A one-year adjustment due to the end of the reinsurance funding mechanism in the Affordable Care Act. The provision was designed to moderate rate increases during the first three years when exchanges were being established. The American Academy of Actuaries estimates that this will add 4% to 7% to premiums for 2017.
- Special enrollment by some consumers who sign up only after they become sick or need care, which has had a significant effect on rates for two insurance plans.
- The rising cost of health care, especially for specialty drugs.
- Pent-up demand for health care among those who were uninsured before the Affordable Care Act.
Lee said, “Covered California is working to address some of these issues on multiple fronts. The exchange is aggressively marketing to attract healthy consumers year-round, and is working to ensure special enrollment is available only to those who meet qualifying circumstances. It is also sampling the special enrollment population to better understand how to make any further improvements needed.”
Covered California is reducing the number of services that are subject to a consumer’s deductible. Starting in 2017, consumers in Silver 70 plans will save as much as $55 on an urgent care visit and $10 on a primary care visit. Consumers in Silver, Gold, and Platinum plans will pay a flat copay for emergency room visits without having to satisfy a deductible, which could save them thousands of dollars.
These improvements build on features already in place that ensure most outpatient services in Silver, Gold and Platinum plans are not subject to a deductible, including primary care visits, specialist visits, lab tests, X-rays and imaging. Some Enhanced Silver plans have little or no deductible and very low copays, such as $3 for an office visit. Consumers in Covered California’s most affordable Bronze plans can see their doctor or a specialist three times before the visits are subject to the deductible.
The contract with health insurers for 2017 ensures that consumers select or are provisionally assigned a primary care physician. Below are the companies selected for the 2017 exchange:
- Anthem Blue Cross of California
- Molina Healthcare
- Blue Shield of California
- Oscar Health Plan of California
- Chinese Community Health Plan
- Sharp Health Plan
- Health Net
- Valley Health Plan
- Kaiser Permanente
- Western Health Advantage
- A. Care Health Plan
The following carriers are increasing their coverage areas in 2017:
- Oscar will be entering the market in San Francisco, Santa Clara, and San Mateo counties.
- Molina will expand into Orange County.
- Kaiser will be available in Santa Cruz County.
With the expansion of carriers, 93% of consumers will be able to choose from three or more carriers, and all will have at least two to select from. In addition, more than 93% of hospitals in California will be available through at least one Covered California health insurance company in 2017, and 74% will be available in three or more plans. Rate details by pricing regions can be found in Covered California’s Health Insurance Companies and Plan Rates for 2017, posted online at: http://coveredca.com/news/pdfs/CoveredCA-2017-rate-booklet.pdf.