Covered California unveiled its new rates for 2018 last week, and announced that all 11 of its participating health insurance companies will be returning for the upcoming year. The rate change involves an average statewide 12.5 increase, said CC officials. However, the rate change varies by health plan and region, with some plans having decreases in their premiums and others having increases.
“Covered California remains robust and strong, and we are pleased to welcome back all 11 plans to compete in regions across the state,” said Covered California Executive Director Peter V. Lee. “While there is ongoing uncertainty and a lack of clarity at the federal level, consumers who need affordable health insurance will continue to have good choices in Covered California next year.”
Shopping for the best rates is as important as ever, CC officials said. Consumers can avoid the full rate increase by shopping for the most affordable rates or the lowest priced plans. CC officials also said that most consumers will receive increased financial assistance from the government, and can avoid the increase that way.
“Covered California’s competitive market means consumers have the power to shop and find the best value,” Lee said. “We know our consumers look for the best deal and often end up paying less than the initial rates suggest.”
The announcement is significant, officials said, because it comes in the midst of uncertainty surrounding the Affordable Care Act, particularly concerning the cost sharing reduction that insurance companies are required to provide to low income customers under the current law. The federal government reimburses the companies. Now, the federal government may be putting limits on the reimbursements.
This year, CC told insurance companies to submit two proposed rates: one that figures in government reimbursements and one that does not. Consumers will still be okay. Though the increase would be present in the total premium they have to pay, their tax credit for the insurance would also increase.
“This action allows Covered California to keep the market stable and protect consumers from this uncertainty,” Lee said. “While most Silver-tier (30% payers) consumers will not see the full impact of the ‘CSR surcharge,’ and every consumer could avoid paying any additional premium by shopping, 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.
Consumers who do not receive subsidies will be encouraged to shop for more affordable plans.
“We’ll be working diligently with health plans, insurance agents, community partners and others as we approach open enrollment to make sure consumers know how to shop smart this fall for 2018 coverage,” said Lee.
Moving forward, Covered California will continue to look for ways to stabilize the market to reassure health insurance companies, provide robust competition and choice and protect consumers, CC officials said.