SACRAMENTO (AP) — Californians buying individual health plans on the state’s exchange will see their premiums rise by an average of 4.2 percent in 2015, about half the increase the industry has seen in the past three years, officials announced Thursday.
Peter Lee, executive director of Covered California, said the proposed rates suggest the state has been able to slow down health care costs while reducing the number of uninsured as the exchange enters its second enrollment year under President Barack Obama’s health overhaul.
“It’s good news for Californians, it’s good news for the Affordable Care Act,” Lee said.
Covered California enrolled 1.4 million people during its first year. The next sign-up period will run from Nov. 15 to Feb. 15.
According to the exchange, about 16 percent of consumers will see their rates stay flat or go down. About a third will see an increase of less than 5 percent, and 36 percent will see their premiums go up between 5 percent and 8 percent. And 13 percent will see premium increases of more than 8 percent. The preliminary rates will now go to state regulators for approval.
Sen. Norma Torres, D-Pomona, said the increases are a reminder that more must be done to enroll young people, particularly Latinos who make up the largest population of the state’s uninsured.
“These rate increases should be a wakeup call for Covered California, and a reminder that more must be done to enroll this eligible population and improve the overall consumer experience,” Torres said in a statement.
Lee acknowledged that even a slight increase is a burden for many people, but he said 88 percent of those enrolled in Covered California receive a tax subsidy. An individual can make about $47,000 and a family of four can make up to $95,400 to be eligible for some kind of premium assistance.
“Covered California and the Affordable Care Act have not made health care inexpensive in America,” he said. “What we’ve done is to give a leg up to people to make it affordable.”
Ten health plans are returning to the exchange, indicating the insurance companies are profiting from the system. Lee said the exchange will look to expand next year.
Health care advocates welcomed Thursday’s announcement, saying it shows the federal law is helping to slow down runaway insurance rates. According to the California HealthCare Foundation, median year-to-year health premiums have risen 9.8 percent from 2011 to 2014.
“The number of uninsured and the skyrocketing of health premiums were for years seen as insolvable problems,” said Anthony Wright, executive director of Health Access California, a health care advocacy group. “The recent surveys and studies and new rates announced today, suggest that while these problems are not solved, California is making significant progress.”
Lee said the state is working with participating health plans to respond to consumer complaints about being unable to access doctors in their networks and outdated plan directories.
State health regulators are investigating Anthem Blue Cross and Blue Shield of California based on a pattern of complaints it has received, and a final report is expected before Nov. 15 when enrollment opens, Department of Managed Health Care spokesman Rodger Butler said.
State Insurance Commissioner Dave Jones said this week that health insurers are politically motivated to keep rates lower to prevent passage of Proposition 45, a measure on the November ballot that would give his office the power to stop rate increases.
Lee called the commissioner’s report showing California’s four largest insurers raised premiums as much as 88 percent “misleading and distracting” because it was not a valid comparison.
California set up its health exchange as an active purchaser, which allows it to negotiate with insurers, decide which health plans get to participate in the individual and small business markets, and to set requirements for participating plans.
Lee said Covered California was able to leverage prices using its large enrollment and the health of the people who signed up. He said people who signed up in the last three months of the enrollment period from January through March were 9 percent healthier than the overall population.