Covered California 2023 Rates Announced–But Congressional Action Matters More

After three years of record-low premium rate increases of around one percent, Covered California, the state’s health care insurance marketplace, today announced 2023 rates, including a new health plan option, and an average increase of 6% for 2.3 million enrollees in the California individual insurance market, including the record-high 1.7 million in Covered California.

While these increases are lower than the national average due to Covered California’s role actively negotiating rates, we as consumer advocates want to highlight that the actual premiums that nearly all enrollees experience will be impacted much more by the decisions in Congress in the next few weeks. In 2021 and 2022, virtually all Covered California consumers saw significant reductions in their premiums, thanks to additional affordability assistance in the American Rescue Plan (ARP) which capped premiums at 8.5% of income for all enrollees – and even less for lower income consumers. These Biden Administration actions have been successful, leading to higher health coverage enrollment and a more stable market, but are set to expire at the end of 2022 if Congress does not act.

Congress is actively considering voting for an extension, along with prescription drug price reform, in the next few weeks, especially given inaction could lead to massive premium spikes for Californians who purchase health care on their own. Without an extension, the average Covered California enrollee will likely see a 82% premium increase, of over $1,000 per year. For those under 250% of the federal poverty level (around $34,000 for an individual), the average increase would be 120%. For those above 400% of the poverty level (around $54K for an individual, $111K for a family of four), the average increase is over $3,700.

Covered California’s important role in selecting and negotiating with health plans for the best value has been key in keeping rate increases modest, in single-digits, but Congressional action is the biggest factor in what almost two million Californians will pay for their health care next year. Health Access California, the statewide health care consumer advocacy coalition, is urging that our Congressional representatives need to act now to prevent premium spikes. If Congress does extend help, then that would shield patients from even these modest rate increases.

As the pandemic continues, it’s never been more urgent for Californians to be covered—Congress needs to act to extend affordability assistance, and individual consumers should shop and compare their options for health plans and premium help. Even those already in Covered California should shop and compare, since the best deal last year may not be the best fit this year, and even an increase could turn into a reduction if you are able and willing to switch plans.

These rate increases pale in comparison to the 80%+ premium spikes that Californians will see if Congress fails to act in the next few weeks, where consumer will have to pay hundreds or thousands of dollars more. If Congress does not act, California consumers would lose over $1.7 billion in affordability assistance–and while the state budgeted funding for backfill, it is just a fifth of what we would lose. If these important federal investments continues, California is potentially poised to take even further steps to lower health care cost-sharing, including eliminating deductibles in Silver plans.

Californians are crying out for affordability relief. Even with other prices rising, health care costs continue to be a major concern for families, and we need both federal and state subsidies, as well as concerted oversight on the health industry to contain costs. While Covered California’s active purchasing power helped keep premium increases below the 10% increase nationally, we need to do more to contain costs, including to robustly implement the new Office of Health Care Affordability to set enforceable targets for the industry. While we seek a federal government guarantee that no one spends more than a percentage of their income on coverage, we hope California continues to act to control the base cost of care.