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Home Legislation California Health Insurance Rates To Rise By 4%

California Health Insurance Rates To Rise By 4%

2 minute read
by Robert Sheen

California’s Affordable Care Act exchange, known as Covered California, has covered_californianegotiated an average 4% increase in premiums for the 1.3 million residents of the state who buy individual insurance through the marketplace.

The modest increase is in sharp contrast to other states, where insurance companies have asked regulators for premium hikes of 20% to 40%.

“We have Chicken Littles who keep saying the sky is falling tomorrow,” Peter Lee, executive director of Covered California, told the Los Angeles Times. “We are proving competition drives prices down.”

Lee said the state negotiated reductions totaling $200 million from the rates that insurers initially sought. The insurers are projected to earn a profit margin of 1% on their sales through the exchange. The proposed rates are still subject to final review by state regulators.

The rates consumers will pay will vary depending on where they live in the state and which insurance carrier they choose. Rates will rise less than 2% in Los Angeles and Orange counties, while residents of Northern California will see increases of 7%. Prices there, the newspaper noted, “have historically been higher because of the market clout of big health systems.”

Blue Shield of California is raising its premiums by an average of 2.3%, while Kaiser is increasing rates by 5.2% and Anthem Inc. a 5.9% increase. In all, 12 insurance carriers offer plans through the exchange.

California law gives regulators the power to select which insurers can issue policies in the state; to set standard co-pays and deductibles, making comparison shopping easier; and to negotiate the rates charged to consumers.

Covered California’s Lee said that premiums will increase by more than 15% for about 30,000 consumers or 2% of the 1.5 million insured through the system unless they change to a different insurance plan.

Even with subsidies, about 44% of those insured through Covered California say they have difficulty paying their premiums, the newspaper noted, and some consumers are dissatisfied with the selection of doctors in their plan’s network.

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