Covered Cal rates up 13 percent

Covered California officials are scrambling to put a positive spin on rate hikes for 2017 that should average more than 13 percent.

obamacare enrollment figures graphicExecutive Director Peter Lee talked up the “power of shopping,” claiming, “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.”

The statewide average change will be 13.2 percent, up from approximately 4 percent in each of the last two years, Covered California confirmed July 19.

The significant increases had been expected and mirror hikes being experienced nationwide with Obamacare. They also verify to some extent warnings from critics who said the Affordable Care Act marketplaces were going to hit their mostly low-income clients with large increases after a honeymoon period.

“Even though the average rate increase is larger this year than the last two years, the three-year average increase is 7 percent — substantially better than rate trends before the Affordable Care Act was enacted,” Lee said.

Among the reasons given for the double-digit rise in premiums bought through the Obamacare exchange was the end of some federal subsidies, the price of specialty drugs and the overall rising costs of health care.

The two major providers — Anthem Blue Cross and Blue Shield of California — sought premium increases that were larger than the 13.2 percent average. The other major carrier, UnitedHealth Group, quit the exchange.

Lee said insurer gouging was not a factor: “While all plans are experiencing different cost pressures, we can be confident their rate increases are directly linked to health-care costs, not administration or profit, which averaged 1.5 percent across our contracted plans.”

Covered California also unveiled the 11 health-care insurers participating in the state private insurance exchange in 2017.

The rate increases are considered preliminary until they go through a review process that is unlikely to result in changes of note.

Read the 2017 plan rates (PDF, preliminary).

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