Following a year that has seen the greatest investment in the Affordable Care Act since the law took effect, Covered California, the state’s health care insurance marketplace, today announced its third straight year of minimal premium rate increases.
In fact, earlier this year, virtually all in Covered California saw reductions in their premiums through federal subsidies, which will continue in 2022. Through the American Rescue Plan (ARP), the Biden Administration took action to increase subsides for those who purchase health care on their own via the marketplace, capping premiums to 8.5% of income across the board – and much lower for middle and lower income consumers. These actions, along with state affordability assistance, have significantly reduced costs for the nearly 1.6 million enrollees in Covered California, leading to higher enrollment and a more stable market.
In part because of this increased enrollment, unsubsidized Covered California consumers will see a rate increase of just 1.8%, and many could see lower costs by shopping around and changing plans. This is the third straight year with record low rate increases, coinciding with the first state subsidy enhancement, which Health Access helped to spearhead, and now with the enhanced subsidies in the ARP. Combined state and federal affordability assistance means that California families will see average savings of over $700 per month in health insurance premiums.
Covered California also announced that all 11 health insurance companies will return for 2021, and a new insurer will enter the market in Contra Costa County. Many insurers will also expand their coverage, giving all Californians at least two choices for coverage and most have 4 or more. Due to the ongoing pandemic, this year’s open enrollment will extend through the end of the year. Covered California is also prioritizing equity by requiring plans to collect race and ethnicity data to identify and address health disparities.
As the pandemic continues, it’s never been more urgent to get covered, and with these new federal and state subsidies, it’s never been as affordable. Californians should look into getting this comprehensive coverage, which will be capped at no more than 8.5% of their income, with affordability assistance that could be worth hundreds if not thousands of dollars. Even those who don’t get subsidies will see minimal rate increases, and could actually also get a lower price by comparison shopping on Covered California. Just as the Affordable Care Act was upheld by the Supreme Court earlier this year, these new subsidies and low rate increases are finally showing the full promise of the law coming to fruition.
California’s premium subsidy program provided proof-of-concept for the subsides extended by the Biden Administration’s American Rescue Plan. Californians should take advantage of this new coverage and economic security for many Californians and their families, and Congress should make this affordability assistance permanent.
Just yesterday, Governor Gavin Newsom signed the health budget bill, AB 133, that will further improve affordability in Covered California next year. It will mean that nearly 700,000 Covered California enrollees will see true zero premium coverage beginning January 1, 2022.
For those who have seen their income reduced significantly or entirely, Medi-Cal offers low to no-cost comprehensive health coverage and enrollment is open year round. Starting in May 2022, anyone eligible based on income age 50 and over can enroll, regardless of immigration status.
With the pandemic prolonging, we urge all Californians to get covered. Even if you checked out Covered California before, look again and see the new options and affordability assistance now available. Health care coverage is the best protection for you and your family’s health and financial stability as the COVID-19 pandemic rages on. Californians should sign up for coverage and this new affordability assistance—and then join the fight to have Congress continue it into the future.