Modest 2016 Rate Hikes For Exchange
The Covered California health insurance exchange has announced modest premium increases for most enrollees for calendar 2016.
Covered California officials said this week that premiums would rise a weighted average of 4% next year. That compares to the 4.2% increase exchange enrollees experienced in 2015.
“This is another year of good news for California’s consumers and further evidence that the Affordable Care Act is working,” said Covered California Executive Director Peter V. Lee. “Covered California is holding the line on rates and keeping coverage within reach of hundreds of thousands of consumers, while giving them more choices than ever before.”
The premium trend for California appears to be deviation from the trend nationwide. Studies from Wells Fargo Insurance and other brokers had projected significant premium increases, citing increases in both insurance claims and healthcare spending, driven in part by rapidly rising prices for pharmaceuticals.
Lee noted that the 1.3 million Californians enrolled through the exchange have a strong “mix risk” and gave Covered California the clout to negotiate fairly low rates with insurers.
“The sheer numbers and overall health of our enrollees allowed us to sit down with the health insurance companies and negotiate rates downward, which will save our consumersmore than $200 million in premiums,” Lee said.
There is a fairly stark differential by geography. Northern California residents who keep their current plan will see a weighted average premium increase of 7%. But those who reside in Southern California will see an increase of only 1.8%. In Southern California, consumers could switch plans within benefit tiers and cut their premiums by nearly 10%. But in Northern California, the best such a switch could accomplish is a 1% increase. Overall, the average weighted decrease statewide would be 4.5%.
Monterey, San Benito and Santa Cruz counties will see the highest premium increases next year, at 12.8%, while Mono, Inyo and Imperial counties will drop by 0.5%.
Virtually every enrollee in the exchange will be able to pick from at least three carriers, officials said. More than 90% of the state’s acute care hospitals will be available through at least one insurer, and nearly three-quarters will be available through at least three carriers
There is a 60-day public comment period on the new rates.
In addition to the 2016 rates, two new insurers will also offer products within the exchange: UnitedHealthcare Benefits Plan of California, an affiliate of the Minnesota-based insurance giant, and Oscar Health Plan of California, which is being offered by a New York-based boutique carrier.
Oscar, which has only been in operation for a few years in New York, is expected to offer coverage only in Southern California, limited to Los Angeles and Orange Counties. The company boasts features such as online video consultations with doctors and other technology-driven features.
“We are thrilled to announce that Oscar is entering California this year," said Oscar CEO Mario Schlosser. "We are excited to share our values and approach to healthcare with the people of California in 2016.”
