Covered California Announces Rates and Plan Expansions for 2017

Sacramento Monthly premiums in California's health insurance exchange will increase by more than 13 percent on average next year, after two major insurers requested large rate increases, officials said Tuesday.

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 cost increases for 2015 and 2015, by contrast, were about 4 percent. We actively encourage Californians to compare: "the plan in your region that was the best deal this year may not be the same next year", said Wright. "We are seeing that happening, just as we predicted".

For many, the bulk of the premium increase will be absorbed by the subsidy paid by the government to help enrollees buy health insurance. However, it is also a state that does not have full rate regulation, and can do more to disclose and address health care costs, from unjustified rate hikes to high prescription drug prices.

"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.

California won plaudits by negotiating 4 percent average rate increases the past two years for its 1.4 million enrollees. Covered California insures about 5 percent of California's population. Larger increases are occurring at higher coverage tiers sold as "gold" and "platinum" plans. And this year, Anthem Blue Cross and blue Shield asked for increases: Blue cross one of 16 percent and Blue Shield one of 19 percent. "It's still a more stable market than other states, and by most measures the Affordable Care Act is working quite well in California".

California is the latest state to roll out a double-digit premium increase for 2017. The substantial increase will be felt by those who keep the plans they have now, officials said. That's left insurers with fewer customers to share the overall cost. "California consumers can not continue to pay more for very limited doctors and hospital networks".

That unpopular decision quickly moved people into coverage that fully complied with the health law and created one giant risk pool for rating purposes.

Insurance rates have been more stable in the employer-based insurance market where many more Americans have coverage, he said.

Tuesday's announcement comes as many other states report big increases in insurance premiums for the fourth year of President Barack Obama's health overhaul.

The expansion of coverage under the Affordable Care Act has driven the percentage of uninsured Californians to a record low.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

  • Wendy Palmer