Covered Cal health insurance rates increasing for 2017: Shopping for plans can still save money

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Last month, Covered California announced its rates for health insurance in 2017 with some health plans intending to expand into new areas this year. This will provide more competition for state health insurance consumers.

The statewide weighted average change will be 13.2 percent, up from 4 percent in 2016 and 4.2 percent in 2015. Inland Empire plans will increase an average of 10 percent compared to 1 percent last year.

“Looking over the last three years, you average these three years, that’s about 7 percent,” said Covered California Executive Director Peter V. Lee. “That is dramatically lower than we were seeing before the Affordable Care Act when double-digit increases were the norm.”

However, most consumers will see a much smaller increase — or pay less next year — if they switch to another plan. In the Inland Empire, the growth of the lowest-priced bronze and silver plan is about half the statewide average.

Mitigating the price increases will be the federal government’s subsidy. About 90 percent of CC enrollees get help to pay for their premiums. The average subsidy covers roughly 77 percent of the consumer’s monthly premium. While premiums will rise, the subsidies will rise as well, CC says.

“Shopping is going to be more important this year than ever before,” Lee said. “Almost 80 percent of our consumers will either be able to pay less than they are paying now, or see their rates go up by no more than 5 percent, if they shop and buy the lowest-cost plan at their same benefit level. That’s the power of shopping.”

Some consumers who choose to keep their plan will see a significant increase in their premium for 2017, while others will see a more modest increase, depending on where they live and what insurance plan they have. The increases for the lowest-priced bronze and silver plans, which have more than 90 percent of CC’s enrollment, are 3.9 percent and 8.1 percent.

Consumers will begin receiving notices in October, when they will have an opportunity to review their new rates and change plans for their 2017 health coverage, according to the CC press release.

Lee said the average rate increase reflects the cost of medical care for consumers, not excessive profit.

In 2017, health-care premium rates will increase throughout the nation, not just in California, because of the expiration of the ACA’s reinsurance, a program that subsidized health care plans that enrolled higher-cost individuals.

Reinsurance was designed to help keep rates down during the first three years of the exchanges to stabilize the market and attract more consumers to build a healthy risk mix. According to CC, this one-time adjustment added between 4 and 6 percent to this year’s rate change.

Other reasons for rate increases include:

• The rising cost of health care, especially specialty drugs.

• Increased usage because of pent-up demand from individuals without health insurance before 2015.

• Special enrollment rules allowing some consumers to delay enrolling in health insurance until they become sick or need care, which seems to have had a significant impact on rates for two insurance plans.

CC’s 11 health insurers are competing across the state for its 1.4 million members. Among the new rules is that all consumers either select or are provisionally assigned a primary-care physician within 60 days of their plan going into effect.

Another change CC is requiring will reduce the number of services subject to a consumer’s deductible. Starting in 2017, for example, consumers in platinum, gold and silver plans will pay a flat co-pay for emergency room visits, with no additional physician fee.

“We’re doing everything we can to make the consumer get the best possible deal,” Lee added. “… for everyone, from the moment you get coverage with us; it means if you need to see a doctor, you don’t have a deductible between you and that doctor visit.”

Since CC began offering health-care coverage in 2014, the uninsured rate in the state has been cut by more than half, from 17 percent at the end of 2013 to 8.1 percent by the end of 2015.

Eleven health-insurance companies will offer programs for the 2017 exchange —

Anthem Blue Cross of California, Blue Shield of California, Chinese Community Health Plan, Health Net, Kaiser Permanente, L.A. Care Health Plan, Molina Healthcare, Oscar Health Plan of California, Sharp Health Plan, Valley Health Plan and Western Health Advantage.

“The sheer number of enrollees and their overall health means consumers in the individual market are benefiting from competition,” Lee said.


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