Last week, Covered California (CC) announced that its premiums for 2023 may increase 6% in January. About 1.7 million Californians get health insurance through the CC marketplace.
A variety of reasons are contributing to the increase, including the possibility that the American Rescue Plan (ARP) may be allowed to expire. If Congress does approve its extension, the possible increase may be reduced to 5%.
Earlier this month, a study of 72 health plans in 13 states that have submitted their proposed 2023 premiums indicated that the median proposed increase for next year is currently 10% (The Peterson Center on Healthcare and Kaiser Family Foundation [KFF], July 18).
“Covered California’s competitive marketplace continues to hold the line on rates that are well below the national average, keeping coverage within reach and giving Californians new choices,” said Jessica Altman, CC executive.
While below the other states, CC’s planned increase is well above increases in recent years. In both 2019 and 2020, the actual increase was less than 1% and last year it was 1.8%.
Several reasons have coalesced to produce this dramatic increase. “Health cost trends” that are simply insurers’ payments to providers such as physicians and hospitals, and to pharmaceutical companies, have increased.
Also, as people adjusted to the presence of COVID-19 in their environments and lives, they are venturing out more often. This includes more frequent visits to doctors’ offices, according to the Peterson Center and KFF study.
“After more than two years of lower-than-normal utilization rates, Covered California’s carriers are seeing medical trends return to pre-pandemic levels, accounting for an average of 4 percentage points,” according to the CC press release.
Of the 72 plans in the study, only four were proposing increases of less than 5% and eight were requesting increases of 20% or more.
Just as health care premiums vary across the country, they vary greatly within California. While the statewide average is 6%, the range is from more than 11% in Mono, Inyo and Imperial counties and 22 other northern California counties, to no change in Fresno, Kings and Madera counties.
For Riverside and San Bernardino counties, the average increase will be 6.7%, slightly lower than Orange County and slightly greater than San Diego County.
CC also had news about its health insurance carriers. A 13th carrier, Aetna CVS Health, has joined the program and will begin offering coverage in the Sacramento area. Also, Anthem Blue Cross is the second carrier, along with Blue Shield of California, to offer full statewide coverage.
Now all Californians will have a choice of two plans and, according to CC. 93% will have a choice of three plans and 81% will have the option of choosing from among four plans.
Independent of CC’s goals and plans is Congress’ action on whether to extend the American Rescue Plan, which provides subsidies for health insurance premiums, or let it expire. If it is not renewed, CC estimates that “… would raise costs for enrollees, including doubling premiums on average for 1 million low-income Californians, and may lead up to 220,000 people to drop their health coverage.” ARP funds have probably lowered monthly premiums by 20% according to CC.
“The biggest factor impacting what our consumers will pay for coverage in 2023 is whether Congress extends the enhanced subsidies, or not,” Altman predicts. “At a time when many people are already facing increased economic pressures, some Californians may make the difficult choice of becoming uninsured in absence of the financial help that the American Rescue Plan provides,” Altman continued.
Already, Secretary of Health and Human Services Xavier Beccera has extended to Oct. 13 the public health emergency order regarding COVID-19. This prevents the state from dropping anyone’s Medi-Cal coverage.