Covered California says health care premiums will go up modestly for most people buying coverage on the state exchange next year by an average of 4.2 percent.
People get information at a Covered California table at Union Station on the health insurance exchange’s opening day (Photo by Anna Gorman/KHN).
“We enrolled a lot of people, they’re healthy, and that’s kept rates down,” Covered California Executive Director Peter Lee said at a press conference on Thursday in Sacramento to announce the rates.
About 1.4 million people purchased insurance on the marketplace in California for 2014, the first year Affordable Care Act insurance was available. California is one of the states that created its own exchange, and it is an “active purchaser” under the law, which means it can negotiate with insurers directly on rates.
The low rate hike is an average, Lee noted: “Not everyone is going to see only a very small increase. Health care is personal. For some, premiums might go up 15 percent, not very many. But for them, they have the ability to shop.”
Lee says the rates were developed over time though rigorous negotiation with insurers. The marketplace barred insurers from changing geographic areas and incorporated children’s dental care in every plan, he said.
Insurers say Covered California’s active role did help keep rates lower. But Charles Bacchi of the California Association of Health Plans says the industry is not expecting medical costs to rise dramatically either.
“It really puts us in a strong position to have good enrollment in year two. Which is really critical to making this a success in California,” Bacchi said.
Consumer advocates are pleased with the proposed rates, which are pending review from California’s insurance regulators.
“Let’s be clear, health insurance is not cheap or easy, there’s a lot more work to do,” said Anthony Wright, executive director of Health Access. “But what an improvement this is from the past. These efforts are making health insurance cheaper and easier than it would have been.”
