Covered California Set to Announce 2017 Premium Rates - NBC Bay Area

Covered California Set to Announce 2017 Premium Rates

    processing...

    NEWSLETTERS

    Covered California Set to Announce 2017 Premium Rates
    Getty Images

    SACRAMENTO - Covered California is scheduled on Tuesday to release 2017 premium rates for people who buy health coverage through the state's health insurance exchange.

    The announcement comes as many other states report big increases in insurance premiums for the fourth year of President Barack Obama's health overhaul.

    Covered California sells health plans to about 1.4 million people who don't get coverage from an employer or from the two large government-funded programs, Medicare and Medi-Cal. The exchange is a central piece of Obama's health insurance overhaul, allowing people to compare policies and collect a subsidy to lower their monthly premiums if they qualify based on their income.

    Average premiums for Covered California rose about 4 percent in each of the last two years, a modest growth rate in an industry that has historically seen prices grow much faster than inflation. Price growth for next year's premiums is likely to be higher as Obama's health law matures and insurers gain experience serving a new population that has turned out to be more expensive than anticipated.

    In states that have already reported insurance premiums for next year, many insurance companies are seeking large increases. In 14 states analyzed by the consultancy Avalere Health last week, the cost of an average-priced plan will rise 11 percent if insurers are allowed to adopt the rates they've requested.

    Individual insurers in some states have requested much higher hikes.

    Consumers facing big premium increases can lower their costs by switching to lower-priced plans, and many have done so. But switching health plans may require them to change doctors, depending on the provider networks offered by each plan.

    Almost 90 percent of Covered California customers get federal subsidies that will help cover the premium increases.

    Health plans are adapting to big changes in the health care market since 2014, when the bulk of Obama's health overhaul was put in place. Fewer people are signing up through the exchanges than anticipated, and they're using more health care services than anticipated. That's left insurers with fewer customers to share the overall cost.

    Insurers are also dealing with the end of two temporary programs created to help them absorb the uncertainties of the new world of health care. The programs helped provide a financial backstop for health insurance companies that took on especially costly pools of consumers.

    California tends to see wide variation in rates across the state. Southern California, which has a highly competitive network of hospitals and doctors, generally has lower rates.

    In Northern California, consolidation of hospital and physician groups has given them leverage to negotiate higher payments from health plans.

    Get the latest from NBC Bay Area anywhere, anytime
    • Download the App

      Available for IOS and Android