CoveredCA Announces Minimal Rate Increase Due to State Steps to Shore Up and Expand Upon the ACA

Covered California announced today that 2020 individual insurance premiums will see a minimal average rate increase of less than one percent. The announcement also highlights the expected increase in health insurance enrollment of over 225,000 Californians due to the new financial help that was included in the 2019-2020 state budget negotiated last month.

These minimal Covered California rate increases, the lowest in memory, are proof that our state’s actions to defend and improve upon the ACA are working. As a result of state actions, most Covered California enrollees will pay less for health insurance, as a lower percent of their income, than they do today, and many more will gain coverage that could not afford it before. More people with health coverage not only helps individuals and families better plan for their financial future, but also helps stabilize the market, lowering costs for everyone.

This announcement shows that California’s leadership on health care has made a real difference and should encourage state policymakers to do more to bring down the cost of coverage and care even further for Californians, and cut our uninsured rate even more.

Californians buying coverage as individuals will benefit from the state budget’s biggest new investment in health care, which will help more Californians afford to purchase coverage. Thanks in part to the advocacy of health consumer groups, the 2019-2020 budget includes $1.5 billion dollars over three years in state subsidies to help low- and moderate-income Californians better afford coverage. The new dollars help resolve the cliffs in coverage subsidies in the ACA, which cut off for those over four times the poverty level. With California’s high-cost of living, many people over that subsidy cliff were still facing significant challenges to afford care. The new affordability assistance now extends to six times the poverty level—around $75,000 for an individual, and $150,000 for a family of four, helping hundreds of thousands of Californians either gain coverage or better afford it.

More detailed in a new Health Access fact sheet on affordability assistance in the 2019-2020 state budget:

  • Estimated 235,000 Californians who currently get no help to afford coverage because they make a little too much will get new help starting in 2020.
  • Almost 670,000 Californians between two and four times the poverty level will get some additional help, beyond what the ACA provides, to lower their premium even further, as a lower percent of their income.
  • Another 20,000 Californians at or below the poverty line will get their premiums reduced to nearly zero. These Californians fall through the cracks of Medi-Cal but will now get coverage aligned with Medi-Cal’s premiums.

Last year, nearly half of the 8% average premium increase in Covered California was due to the federal attack on the ACA by zeroing-out the individual mandate penalty and rates would have been at least 2-5% higher in 2020 without state action. Californians won’t see that sabotage surcharge this year, and will actually see additional state subsidies to bring down their premiums. All of the money raised from the mandate goes to fund greater affordability assistance in Covered California, helping to keep our health system strong. While other states continue to face the ongoing attacks on the ACA by the Trump Administration, California is protecting our health consumers and showing how to build on our progress and expand coverage.

The success in keeping premiums in check for 2020 should encourage California policymakers to make more investments in additional affordability assistance in future budgets. Earlier this year, Covered California modeled a $2 billion investment that could cut the number of uninsured in the individual market in half, which should be our next goal, ultimately moving toward universal coverage. California is leading the nation on the way to both build on the ACA, providing tangible financial help to families now, and to do the planning and take the steps to make health care a right for all.

Still, more help is needed: The #Care4AllCA campaign of over 70 consumer and community groups sought these investments, and seek more to cut the uninsured in the individual insurance market in half.