Premium Growth Slows in California’s Individual Market Following ACA Implementation

Premium Growth Slows in California's Individual Market Following ACA Implementation

Premium rate growth for health plans sold in California’s individual market has slowed since the Affordable Care Act (ACA) and Covered California, according to a report by the California HealthCare Foundation (CHCF). The report is based on a review of insurers’ rate renewal filings from 2011 to 2016. With CHCF’s new interactive tool, users can see how premium rate increases in the individual market have changed over time. The following are key findings:

  • The median rate increase was 6% in 2015 and 3.8% in 2016, lower than the median increases of 8.2% to 10% from 2011 to 2013.
  • A similar trend was also found among increases for filings affecting 25,000 enrollees or more.
  • Three-quarters of enrollees in 2015 and 2016 were in plans that filed increases of 6% or less compared to 9% or less in 2012 and 19.4% or less in 2013.

ER Visits Continue to Rise since Implementation of Affordable Care Act

Three-quarters of emergency physicians say that emergency visits are going up, according to a poll by the American College of Emergency Physicians (ACEP). This is a significant increase from just a year ago when less than half reported increases. Most report little or no reduction in emergency visits due to the availability of urgent care centers, retail clinics, and telephone triage lines. About 90% of more than 2,000 respondents have also seen an increase in the severity of illness or injury among emergency patients.

Michael Gerardi, MD, FAAP, FACEP, president of the ACEP said, “The reliance on emergency care remains stronger than ever. It’s the only place that’s open 24/7, and we never turn anyone away. Rather than trying to put a moat around us to keep people out, it’s time to recognize the incredible value of this model of medicine.”

Twenty-eight percent report significant increases in all emergency patients since the requirement to have health insurance took effect. In addition, 56% say the number of Medicaid patients is increasing.

A report by Health Policy Alternatives finds that policymakers and health insurance plans are failing in their efforts to drive Medicaid patients out of emergency departments and into primary care. More than half of providers listed by Medicaid managed care plans could not offer appointments to enrollees, despite a provision in the ACA boosting pay to primary care physicians who treat Medicaid patients. The median wait time was two weeks, but over one-quarter of providers had wait times of more than a month for an appointment.

“Medicaid access to primary and specialty care is not timely, leaving Medicaid patients with few options other than the emergency department. In addition, states with punitive policies toward Medicaid patients in the ER may be discouraging low-income patients with serious medical conditions from seeking necessary care, which is dangerous and wrong,” said Orlee Panitch, MD, FACEP, chair of EMAF and emergency physician for MEPHealth in Germantown, Maryland.

Gerardi said, “America has severe primary care physician shortages, and many physicians will not accept Medicaid patients because Medicaid pays so inadequately. Just because people have health insurance does not mean they have access to timely medical care.”

Dr. Gerardi raised concerns about the closure of hospitals and emergency departments in states that have not expanded Medicaid. “Hospitals received less Medicaid funding for charity care when the ACA took effect, because more people were supposed to have health insurance coverage. But hospitals are hurting in states that didn’t expand Medicaid. For example, the closure of a hospital in Baton Rouge resulted in a crisis for another hospital that inherited all the patients, many of whom are uninsured, and now this hospital may close as well. The average reimbursement for a Medicaid patient in the ER is about $43, but it’s much lower in many states,” he said.

Forty-two percent of emergency physicians would expect an increase in emergency visits if federal subsidies for health insurance coverage were to be eliminated in their states, which may happen if the Supreme Court decides in favor of the plaintiff in King v. Burwell

The state of ACA implementation

A new Commonwealth Fund survey found significant differences in how various states have implemented the Affordable Care Act, with California, New York, Oregon and Vermont among the 10 states doing the most to implement the law and Texas, Alabama, Missouri and Wyoming among the states doing the least. Twenty-four states have not expanded Medicaid eligibility, 16 and the District of Columbia have established insurance marketplaces, 32 states and the District of Columbia have take legislative or regulatory action to implement at least one ACA change, and seven states have taken steps to implement all three of the law’s primary components, the report found. HealthDay News (1/31)

ACA Implementation in California

The Affordable Care Act has already made a difference for millions of Californians who have new consumer protections — from removing lifetime limits and arbitrary caps on coverage to mandating coverage of preventative services without co-payments or cost sharing, according to Health Access. Hundreds of thousands of Californians have new financial help to afford care, including seniors on Medicare getting prescription drugs and small businesses getting tax credit s to continue to offer coverage to their workers.

The most recent 2013 estimates are that over one million Californians have been able to get coverage through new options provided under the Affordable Care Act. Over 21,000 Californians who were denied coverage by insurers due to their health status now have coverage through California’s ACA-funded Pre-existing Condition Insurance Program (PCIP). PCIP had 16,000 enrolled on July 31, 2012. Over 435,000 young California adults up to age 26 have coverage through their parent’s health plan under the ACA and state conforming legislation. Over 615,500 Californians in 53 counties have new coverage through Low-Income Health Programs (LIHPs) – the most expansive early expansion of coverage under the Affordable Care Act in the country.

Other provisions that have helped more people are the small employer tax credit, the early retiree reinsurance program, the financial relief and savings for the state budget, and the prevention of additional state cuts to eligibility and enrollment.

About 8,978,000 insured Californians gained new consumer protections. The over two million Californians who buy coverage as an individual now have the security that insurers are no longer permitted to rescind coverage, especially after the patient gets sick. Some ACA provisions provide direct financial assistance to allow patients and policyholders, seniors and small businesses, to get relief when paying premiums.
Health Access says the following efforts have helped consumers afford the cost of health care:
• No-Cost Preventative Care: 6,181,000 Californians now have preventative care without cost sharing, so there is no financial barrier between them are these screenings and services.
 Rebates: $73,905,280 in rebates were issued to the policyholders of 1,877,186 Californians because their insurance companies did not spend enough of their premium dollars on giving health care, under the ACA’s medical loss ratio provision.
• Rate Oversight: Over 1,507,532 Californians saved over $175.2 million as a result of the rate review process when Anthem, Blue Shield, and Aetna rate hikes that were retracted, rolled back, or withdrawn.
• Prescription Drug Help in Medicare: 319,429 California seniors and people with disabilities saved $453.8 million in prescription drug cost, under the ACA provision that begins the process to close the Medica re prescription drug donut hole.
• Small Business Tax Credit: In the 2011 tax year, over 375,000 California small businesses (70% of the total) were eligible for the tax credit to help pay for the cost of coverage of their 2,442,900 California workers. The average credit is $752 per worker. The average credit is $1,000 per worker for the 158,000 businesses that are eligible for the maximum assistance.

Other benefits include state budget savings yielded in the recent Medicaid waiver, which helped prevent further budget cuts. This list doesn’t include the millions of dollars in federal grants to enhance public health and prevention efforts, to build capacity in community clinics, to set up Covered California, and to improve consumer assistance programs — all of which have an economic impact as well.

Here are some specific examples of California’s leadership:
1. California was the first state to establish an insurance marketplace — Covered California. Covered California will also standardize benefit packages so consumers can make apples-to-apples comparisons.
2. The California Legislature passed laws requiring new essential benefits standards for coverage that will go into place in 2014. In addition, California mandated maternity coverage as a basic benefit 18 months early, in July 2012. It revived a benefit that most insurers were no longer giving in the individual insurance market.
3. With bipartisan authorship, California created the biggest pre-existing Condition Insurance Program in the country, a new option for over 16,000 Californians who were denied for private plans due to their health status. (The next highest state has around 10,000 enrollees.) PCIP became a victim of its own success, this month closing to new enrollees until 2014, when such denials will not be allowed. (MRMIP, the more limited state high-risk pool, will remain an option through 2013.)
4. California quickly implemented the ACA provision that banned denials for children with pre-existing conditions starting early in 2010. When insurers balked, state law made it clear that insurers who refused to offer policies to children would be barred from covering adults as well — bringing the major insurers back into the market. The state law also went further than federal law, to limit what children with pre-existing conditions can be charged to no more than twice any other child for the same policy.
5. California has been one of only five states to expand coverage early. The state has been the leader, using federal matching funds so that over 500,000 Californians are now getting coverage in county-run low-income health programs. (This total is more than 20 times the other states with early Medicaid expansions.) These enrollees will be shifted to full Medicaid coverage on January 2014.)

The major coverage expansions of the ACA will begin January 2014. California can cut the number of uninsured by half or even two-thirds, and provide more security for those with coverage. The Medicaid program will be expanded to cover virtually everyone around or below the poverty level, and affordable private coverage will be available for everyone who doesn’t get it through an employer. Models developed by the University of California project that, in five years, 1.2 million to 1.6 million Californians will enroll in Medi-Cal; and another 1.8 to 2.1 million will enroll in subsidized coverage in the Exchange. If done correctly, it will be the biggest expansion of coverage since the creation of Medicare and Medicaid in the 1960s. For more information, visit

Guide to Tracking ACA Implementation in California

The California HealthCare Foundation has created a guide to track progress toward the January 2014 launch of the central provisions of the Act. “With California hard at work creating new private and public insurance options, among other ACA requirements, this guide will help the public, members of the media, and stakeholders keep a close eye on implementation activities,” said Marian Mulkey, director of CHCF’s Health Reform and Public Programs Initiative. To get the guide, visit

Agents can help advise on corporate wellness programs

Large employers are shifting toward wellness programs to manage health costs, but fewer small and midsize businesses are developing and using wellness programs. Trusted agents are well positioned to advise businesses on implementing health and wellness programs, writes Barbara Stewart, a vice president with Washington National Insurance Co. Agents can help employers see the value of wellness programs and incentives, advise on the basic elements or programs to implement, and guide employers in developing the program. (10/24

Last Updated 01/19/2022

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