Covered California projects 13.2 percent average hike in 2017 health premiums
The Tuesday announcement came as consumers were encouraged to "shop around" for cheaper coverage under President
"We've known for a long time that 2017 would be a transition year," said
Other factors include nationwide hikes in specialty drug costs and "substantially sicker" consumers enrolling during the off-season special enrollment period, Lee said.
The premium hikes are not due to health insurer profits, he said. "We kicked the tires hard. ... This isn't about health plans making big buckets of money. It's about rising costs of health care." He said profits averaged 1.5 percent across all of the 11 health insurance plans under Covered California.
The average premium increase varies widely by geographic region. Some consumers will see only single-digit rate hikes, Lee noted, while others will have substantially higher rates. In the four-county
Those who switch plans, he said, could actually pay less than last year or only up to 5 percent more. Lee noted that 90 percent of Covered California enrollees will still be eligible for federal subsidies to help cover their premium costs.
In each of the last two years, rate hikes for Covered California policies were about 4 percent, putting the state's three-year average at 7 percent.
Lee said one of the biggest factors for 2017 was the anticipated loss of so-called federal "reinsurance," which was provided to insurance companies for three years to cover startup costs for Obamacare. He also said that two of the state's largest insurers --
Consumer groups said the projected rate hikes are an urgent reminder that state regulators and legislators need to address prescription drug and other health care costs.
"These rate hikes indicate the urgency of getting more disclosure on health care costs, especially prescription drug prices," said
At least two pending state bills, SB 908 and SB 1010, call for more disclosure of insurers' rate increases and specialty prescription drug costs.
"No one in
"It's important to remember that health care premiums are based on the cost of medical care," Bacchi said. "How much it costs for an in-patient stay or a doctor visit or a prescription drug are the largest determinants of health care premiums."
Even with this year's rate hike, he said the current marketplace is still preferable to conditions prior to passage of the Affordable Care Act, when annual double-digit increases were routine and those with pre-existing conditions were often unable to get insured.
For consumers, the new rates make it essential to shop for the right plan when open enrollment starts on
Covered
In the
In October, policyholders will receive notices from Covered California and their health care insurer about the new rate increases. During the open enrollment period, running from
In the last three years, Lee said, the number of uninsured Californians -- 8.1 percent as of
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