California's Obamacare Rates to Average 4.2 Increase in 2015

Thursday, 31 Jul 2014 03:23 PM

 

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Health-care plan premiums will rise an average of 4.2 percent next year in California’s insurance exchange, the largest Obamacare market in the U.S., state officials said.

The increase is considered low by officials at Covered California, the authority that runs the state’s exchange, who said many customers would see a decrease or no change.

Premiums for health plans under the Patient Protection and Affordable Care Act, known as Obamacare, loom as a key issue in 2014 congressional elections and are a practical concern for insurers. Large premium increases risk chasing off the healthy customers needed to balance the cost of covering the sick.

“We have changed the trend for health-care costs,” Peter Lee, the executive director of Covered California, said today at a news conference.

About 1.4 million people signed up for private plans in Covered California by mid-April, more than in any other state, according to the U.S. government. Ninety percent of those customers received subsidies to reduce their premium, Lee said.

Many Californians saw large premium increases this year, the first time plans were available through Covered California and other exchanges set up under the health law. Rates increased an average of 22 percent to 88 percent compared with 2013 for the four largest plans in the state, Dave Jones, the state’s insurance commissioner, said July 29.

Coverage Requirements

The Affordable Care Act requires insurers to cover anyone regardless of their health, limits what they can charge older people and mandates a package of basic benefits including prescription drugs and maternity care. While those policies have expanded access to insurance to people who previously would have been denied coverage or charged prohibitive prices, they have generally increased premiums for healthy people, insurers say.

Ten insurers will sell plans in Covered California next year, the authority said, including WellPoint Inc. The Indianapolis-based company, the second-biggest U.S. health insurer, said on Twitter that its average increase in 2015 in California is a “modest” 5.8 percent.

“Extremely happy to be part of a sustainable & affordable exchange,” the company said in its tweet.

 

© Copyright 2014 Bloomberg News. All rights reserved.

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