Covered Cal rates up 12.5% in ’18

The average statewide premium for 2018 will reflect a 12.5 percent increase, California’s Obamacare operation says.

Obamacare in California logo - health exchangeLooking for positives in a time of uncertainty, Covered California played up its stability — “all 11 participating health insurance companies will be returning for the upcoming year” — and cited the “ongoing uncertainty and a lack of clarity at the federal level.”

But one of those 11 insurers is pulling back significantly, leaving 153,000 customers in search of new coverage.

As was the case last year, Covered California chief Peter Lee said consumers could mitigate the price increases by shopping around: “Covered California’s competitive market means consumers have the power to shop and find the best value. We know our consumers look for the best deal and often end up paying less than the initial rates suggest.”

Built into the rate increases was the end of the “holiday” on health plans’ taxes under the Affordable Care Act. “Without the one-time increase for the (health insurance tax), the average increase for the health plans Covered California contracts with would have been less than 10 percent,” Covered California said.

Even that 12.5 average increase isn’t secured, however. A loss of federal cost-sharing reductions (CSRs) — threatened by President Trump — could lead to further charges on silver-tier plans for those who receive subsidies. Those charges could double the 2018 increase. (Silver plans are the most popular in the Obamacare metal-tier structure and the second-least expensive.)

“We hope that we do not need to implement this work-around that would cause unnecessary confusion and ultimately cost the federal government more than it would to continue to make the payments directly,” Lee said. “A decision by the federal government is needed in the next few weeks.

“Without clear confirmation from the administration that these payments are secured, we will be forced to have health insurance companies in California add a CSR surcharge to the silver-tier rates.”

Silver-tier consumers who receive no subsidies will be encouraged to explore purchasing a different metal-tier product in Covered California, the Obamacare operation said.

Both the rate increases and the CSR surcharge are preliminary and subject to regulatory review, but are expected to pass muster. Premiums are greatly affected by region, with most Northern California consumers paying more than those in Southern California.

While Covered California has retained its health insurance providers, there is a serious cutback that looks to affect about 10 percent of customers: “Anthem Blue Cross of California is withdrawing from 16 of California’s 19 pricing regions where it serves approximately 153,000 consumers, while remaining in three regions (regions 1, 7 and 10) where it covers more than 108,000 consumers (41 percent of its current enrollment).”

Covered California said it would take “robust steps in the months ahead to assist the affected Anthem consumers.”

Covered California had postponed its annual rate announcement by several weeks as the political chaos surrounding health care policy swirled in the nation’s capital.

Open enrollment begins Nov. 1.

> View Covered California’s 2018 rate booklet (PDF).


  1. Stephanie Hueg says:

    So is covered California just going to take this from the insurance companies. We are not getting better coverage the CEO’s just gave themselves a raise. who’s going to do something about this? Why are the citizens just sitting there and not pushing back? Oh I know, the insurance companies might pull out. What a threat. Push them out and take the business from them. California can do it better for less.

Speak Your Mind