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Consumers Union on Covered California’s proposed health insurance rate increases for 2018

CU praises state exchange for taking steps to protect consumers, says uncertainty over ACA is damaging options for affordable coverage

SACRAMENTO, CA — Covered California issued proposed rate increases today for Californians buying coverage on the individual health insurance market. Given the uncertainty over the Affordable Care Act and whether the President will sign off on cost-sharing reduction (CSR) payments, the state’s health insurance exchange deserves praise for working creatively to preserve affordable coverage options for Californians, according to Consumers Union, the policy and mobilization arm of Consumer Reports.

Still, consumers will face an average 12.5 percent rate increase if they stay with their current plan, while those who shop and change coverage will find better deals.  In the absence of a clear commitment from the Administration and Congress to fund cost-sharing reductions, consumers opting for a Silver-tier insurance plan may face an additional “CSR surcharge” of 12.4 percent, on average.  The rate increases announced today also reflect the start of the health insurer tax mandated under the federal law, which adds a one-time 2.8 percent increase to rates.

“It’s not surprising to see larger rate increases than what we would have hoped for given the tremendous uncertainty surrounding the future of the ACA and cost sharing reduction payments,” said Dena Mendelsohn, Staff Attorney at Consumers Union. “Consumers  are fortunate that Covered California actively negotiated with insurers and worked with them to maximize premium tax subsidies for those who qualify and minimize the fallout if those payments are cut off.  Covered California’s track record demonstrates that states that are committed to making the ACA work can deliver much better healthcare results for consumers.”

Consumers should be aware that the rate increases announced today are weighted statewide averages. Because healthcare is local, rates between regions will vary. Consumers should look at proposed rates in their region rather than relying on averages. Additionally, rates announced today are not final. The state’s health plan and insurance regulators, the Department of Managed Health Care and Department of Insurance, will subject these rate requests to another layer of review and could press for further reductions if they find any of the increase requests unjustified. Consumers have 60 days to submit their own comments to the regulators as well. Rate filings and additional information are available on the following sites:

The proposed 2018 rates announced today, once finalized, will affect:

  • Over one million Californians who have already purchased insurance through Covered CA for 2017 and are coming up for renewal this Fall;
  • Those applying this Fall for coverage from Covered California in 2018; and
  • Those who buy certain individual policies outside of Covered California for 2018. The law requires companies that sell products in Covered CA to sell the same products outside of the Exchange at the same premium. (Note: Financial assistance, which nearly 90% of enrollees at Covered California receive, is only available  for policies purchased through the exchange)

Contact:  Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 7606