With Covered California releasing its regional rate data on July 19, many regions across the state will see little to no change in their underlying rates while other regions such as parts of the Central Valley will see an average rate decrease, and some will see modest increases.
Earlier this month, Covered California announced that Californians will only see an average premium rate increase of less than 1 percent or 0.8 percent in 2020 for the state’s individual market - the lowest change in the exchange’s history since it opened for business in 2014.
“These regional rates confirm once again that health care is local and personal. It also affirms that the overall story is a good one for consumers across California,” said Peter V. Lee, executive director for Covered California. “Even before considering the positive impact of new state subsidies, many Californians will be seeing little change or even decreases in their underlying premiums.”
Both, Covered California officials and health advocates in the state remind consumers how important is to shop and switch plans if that is the best option for them.
In some cases consumers in California could see their premiums decrease by an average of 9 percent if they shop around for the best deal, which could mean that many Californians’ premiums will be even lower than their current premiums while maintaining the same level of benefits.
“Most in Covered California will pay less next year, more people will get affordability assistance, and even those who buy coverage without subsidies will be paying less, especially if they shop around,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition. “Consumer advocates recommend that Californians take full advantage of the ACA and new state subsidies to afford coverage and use their power to shop and switch to get the best value.”
“Covered California’s competitive marketplace puts consumers in the driver’s seat by giving them the power to save money by switching plans and maintaining the same level of benefits,” Lee said. “Our health insurance companies know that if they don’t have the lowest rates possible, they are going to lose consumers.”
Consumers in Region 10 which includes San Joaquin, Stanislaus, Merced, Mariposa and Tulare counties could see a rate reduction of 9.3 percent if they shop and switch plans.
In Region 11, which covers Fresno, Kings and Madera counties consumers could see an increase of 1.7 percent while in Kern County or Region 14, consumers could see a rate reduction of 5.1 percent if they shop and switch.
“In our high-cost-of-living state, at least a third of Californians were choosing ‘bronze’ high-deductible plans with little coverage in order to afford premiums,” said Wright. Thanks to the investments in this year’s state budget and other state actions to safeguard us from the Trump Administration’s sabotage of our state’s health care system, those consumers will get more financial support than ever before. Over 200,000 Californians are expected to be newly covered, but we hope many currently covered switches to a better plan with a lower deductible.”
“We are pleased to continue offering Kaiser Permanente care and coverage through Covered California, and throughout our California service areas next year,” said Bill Wehrle, vice president, Health Insurance Exchanges, Kaiser Permanente. “Our 0.2 percent statewide average increase for 2020 plans reflects our commitment to providing high-quality, affordable care.”
Covered California projects 922,000 people will be eligible for a new subsidy program that lowers the cost of their coverage, including 235,000 middle-income Californians who previously received no federal help because they exceeded federal income requirements. They will be eligible to receive an average of $172 per household, per month, which will help them save an average of 23 percent off their current premiums.
Other consumers who are projected to benefit from the new state subsidies according to Covered California includes an estimated 23,000 enrollees whose annual household income falls below 138 percent of the federal poverty level (FPL), which is less than $17,237 for an individual and $35,535 for a family of four. They will see their premiums for the benchmark plan lowered to $1 per member, per month.
Also an estimated 663,000 people who currently receive federal financial help will be eligible to receive an average of an additional $15 per household, per month, which will help them save an average of 5 percent on their current premiums.
Many of these consumers, particularly those who live in high-cost regions, will see significant savings with annual reductions in their health care premiums in the hundreds and even thousands of dollars.
“This first-in-the-nation program will make coverage more affordable for many middle-income Californians, such as small-businesses owners, entrepreneurs, contractors or workers in the gig economy,” Lee said. “Every consumer is different, and even without the new state subsidies in place yet, many will see their premiums go down in 2020.”
The new state subsidies will only be available through Covered California. The amount of financial help consumers receive will vary depending on their age, their annual household income and the cost of health care in their region.
“The success in keeping premiums in check shows that we are on the right path towards universal health care coverage, but we are not there yet,” said Wright.
According to Covered California officials, the new state subsidies and California’s restoration of the individual mandate were key factors in driving down premiums in 2020.
“Thanks to these bold steps from California’s leaders, rates across the state in 2020 will be on average from 2 to 5 percent lower across the state than they would have been without these policies,” Lee said.
The state mandate will be administered by the California Franchise Tax Board. People who choose to go without coverage they can afford in 2020 will be subject to paying the penalty as part of their annual state tax filing. Consumers whose health insurance costs do not exceed a certain percentage of their income could face a penalty of up to nearly $2,100 per family, which is based on 2.5 percent of household income or a minimum of $695 per adult, whichever is greater.
“We applaud the actions of the Governor and the Legislature to support expanded access to high-quality, affordable care and ensure coverage for as many Californians as possible.” Wehrle said. “California is showing that sound policies bring real benefits for consumers – including better rates.”
Covered California also announced that three health plans would be expanding their coverage areas, giving many Californians more choice and competition.
Anthem Blue Cross — which is currently only available in Northern California, Santa Clara County and the Central Valley — will now be available to 59 percent of Californians as it expands into the Central Coast, parts of the Central Valley, Los Angeles County and the Inland Empire.
Blue Shield of California will expand its HMO plan into parts of Tulare and Riverside counties and add coverage in parts of Kings and Fresno counties.
“With a major national plan re-entering significant markets in the state, and other plans expanding their offerings, we’re ensuring virtually everyone across California has a choice in coverage,” Lee said. “Covered California is proof that when you have a competitive market, it can work for both consumers and health plans.”
As a result of the expansion, 99.6 percent of Californians will be able to choose from two carriers or more in 2020, and 87 percent of Californians will have three or more choices, according to Covered California.
“We anticipate consumers will find us to be one of the most competitive and comprehensive choices when they seek health coverage for 2020,” Wehrle said.
The proposed rate changes, negotiated with Covered California, have been filed with regulators and are subject to their final reviews. Consumers will be able to renew their existing plans or begin signing up for 2020 coverage in the fall.
Consumers can find out what they will pay for their 2020 coverage starting during the renewal period in October, when they can visit Covered California’s website at www.CoveredCA.com and begin using the Shop and Compare Tool for 2020.
Consumers who do not have health insurance will be able to begin signing up for 2020 coverage in the fall. Others with special qualifying life events, like losing their coverage or moving, can enroll year-round. Medi-Cal enrollment is also year-round.
Interested consumers should go to www.CoveredCA.com to find out if they qualify for financial help and find free local help to enroll.
They can contact the Covered California service center for enrollment assistance by calling (800) 300-1506.