We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 

Covered California Premiums To Rise Nearly 9 Percent

Rich Pedroncelli / AP Photo

FILE - In this Feb. 12, 2015 file photo Laura San Nicolas, right, and her daughter Geena, wait to meet with an enrollment counselor to sign up for health insurance at Sacramento Covered in Sacramento, Calif.

Rich Pedroncelli / AP Photo

Consumers on the state’s individual health-insurance marketplace will see nearly a 9 percent increase in premium costs, Covered California announced on Thursday.

“In many ways, the turbulence and rollercoaster we face across the nation continues to lap on the shores of California,” said Peter V. Lee, the exchange’s executive director, during a conference call.

Lee attributed much of the increase to the removal of the federal insurance mandate penalty. Starting in 2019, Americans won’t be charged for not having insurance. Covered California estimates this will result in 262,000 consumers leaving the individual market.

President Trump signed a tax bill in January that repealed the penalty, arguing people shouldn't be required to maintain insurance.

About 1.4 million people currently get coverage through the exchange.

“The rising costs, the removal of the penalty, will encourage them to take gambles that are a bad bet for them and a bad bet for the health care system at large,” Lee said.

The premium rate increases, on average 8.7 percent, will have the largest impact on Covered California consumers who do not receive government subsidies.

For subsidized customers, who make up 88 percent of Covered California enrollment, premium assistance will rise along with the rates.

All 11 insurers that participated in the market last year will remain, and customers who shop around for lower-cost plans may be able to reduce or avoid a premium increase, Lee said.

Gerald Kominski, a fellow with the UCLA Center for Health Policy Research, said the 8.7 percent increase is significant, but it could be a lot worse.

“It’s smaller than the last few years, larger than the early years,” he said. “One of the great concerns was that zeroing out the tax penalty for not being insured could have had a really detrimental effect on premiums. In light of that, this is relatively good news in my opinion.”

Still, the premium increases will be a hard hit for the middle class.

“It’s not enormous, but for any family that is struggling to make ends meet, another $44 a month for health care is not a trivial increase,” Kominski said.

He does not expect the changes to impact consumers on employer-sponsored plans.

The severity of the increase varies depending on where you live in California. Monterey, San Benito and Santa Cruz counties are expected to see a 16 percent jump, while residents in Mono, Inyo and Imperial counties will see their premiums go down. This is due to differences in population and market competition.

A California-specific insurance mandate is a possibility, but consumer advocates say there are other actions the state could take to make insurance more affordable. Assembly Democrats requested funding from the state budget this spring for subsidizing Covered California and expanding Medi-Cal, but the efforts failed.

Currently, lawmakers are trying to ban short-term insurance plans, another effort from the Trump administration that could draw healthy buyers away from the state marketplace.

“We should urge our state legislators to do more,” said Anthony Wright, director of patient advocacy group Health Access, in a conference call. “Californians can insist that a new governor and a new legislator provide greater affordability assistance in Covered California, so everyone can afford coverage in this high cost-of-living state.”

Renewal and signup for Covered California begins in October.

Sign up for ReCap

and never miss the top stories

Delivered to your inbox every Wednesday.

Check out a sample ReCap newsletter.