After a honeymoon period of several years, Covered California customers will be looking at a meaningful increase in premiums for 2017.
The state Obamacare operation is predicting rate increases of 8 percent next year, it said in a budget proposal. That’s double the 4 percent average of the past two years, but lower than projections elsewhere in the nation for Affordable Care Act marketplaces.
Some consumer advocates said California’s 8 percent increases may turn out to look comparatively good. In Maine, for instance, insurers are seeking premium hikes of as high as 23 percent.
The actual increases in premiums that Californians will pay won’t be known for several months. The next open enrollment period begins in the fall.
“Covered California will be wholly self-sufficient for the first time” in fiscal year 2016-17, the agency noted. This marks the first year Covered California will rely solely on a percentage of revenues collected from health plans — an assessment of 4 percent. Previously, the operation benefited from federal startup grants, one of which protected it from costs of “high-risk” claimants.
“We do not in any way rely on state general funds,” Covered California chief Peter Lee said. He has called 2017 “an adjustment year.” The agency said that after 2017, increases through 2020 would settle back to about 5 percent.
Covered California is transitioning from the initial phase of rapid expansion to a period of more moderate enrollment gains, the budget proposal said.
Overall, Covered California seeks a budget for 2016-2017 of $308 million — “very close to previous budget projections.” Among the budget lines that produced reductions were marketing costs for the startup.
The state Obamacare operation anticipates modest 2 percent growth in enrollment.
About 3 percent of Californians remain uninsured, many preferring to pay the federal healthcare penalty than monthly premiums.
2017 generally has been expected to be a year in which premiums began to reflect the true costs of providing coverage under the Affordable Care Act. UnitedHealth Group rattled the market last month when it said it was withdrawing from most of the Obamacare markets because of losses.
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