The Newly-Announced 2015 Covered California Rates

Last week, Covered California, the state health insurance marketplace created under the Affordable Care Act with over 1.4 million Californians enrolled, announced their tentative 2015 rates for the health insurance plans they will offer, showing only a modest average 4.2% rate increase.

Here’s the press release, and here’s several news clips from Kaiser Health News, APSacramento Bee, San Francisco Chronicle, LA Times, Orange County RegisterFresno Bee, San Jose Mercury News, Marketwatch and others.

This is a good news announcement, with implications beyond California and beyond health care. For decades, we have worked with Californians facing the worst of the health crisis nationally, from a sky-high uninsured rate to denials of pre-existing conditions to double-digit rate increases year after year. With the Affordable Care Act, we are seeing progress on access and affordability: California has seen the number of uninsured cut in half, and with the news today, the premium rate increase have been cut in half as well.

IMPACT OF RATES FOR CALIFORNIANS: This news means that not only will 1.4 million Californians be able to renew their new Covered California policies, without significant rate hikes; but we are in a good pricing position to enroll many more of the remaining uninsured. Practically, almost 90% of Covered California have affordability subsidies, that will go up in 17 of 19 regions to help deal with the increases. Consumers will also be able to shop around, because they won’t be locked in to one plan or locked out of any because of pre-existing conditions. Because of these rates, less people will go uninsured, live sicker, die younger, and be one emergency from financial ruin. Health insurance is still not cheap or easy–there’s more work to do–but what a improvement, as it is now cheaper and easier than it would have been.

ON PAST PREDICTIONS: This is a rebuke to all the Obamacare naysayers and political opponents who predicted double-digit rate increases. Last year, when Covered California announced competitive rates, below what CBO or their own actuaries had projected, they predicted that rates would skyrocket the next year. The Obamacare haters were once again wrong, as shown by these modest rate increases in the first year where we can do true apples-to-apples comparisons. Those who continue to campaign for the repeal of the ACA, in this state or anywhere in the nation, are increasingly having to deny the facts on the ground here in California–that Obamacare is working and benefitting millions of Californians.

IMPLEMENTING AND IMPROVING: These results are an endorsement of the need for more reform, not less. California took steps to not just implement but improve the ACA to help get us here: an exchange that actively negotiates for the best price and value; the standardization of benefits to encourage competition; early and aggressive steps to do outreach and enrollment.

VIGILANCE ON NETWORKS: Holding the line on premiums and getting people covered is only one step–this needs to be coupled with strong vigilance on ensuring consumers get the value they serve, especially with regard to access to care. After concerns with some insurers “narrow networks,” we advocated and our pleased that legislators and regulators are acting to ensure network adequacy and timely access to care. To ensure adequate networks, both California regulators are stepping up enforcement, with surveys and even new regulations, and key legislation is pending. We are pleased that these rates for products that already reflect broader networks, and that the most problematic network issues from last year–like networks restricted to one county–have been addressed by insurers.

PROGRESS IS POSSIBLE: For years, the number of uninsured and skyrocketing health premiums were seen as intractable problems. But recent surveys and studies, and the new rates announced today, suggest that while these problems are certainly not solved, we are making significant progress using the tools of the Affordable Care Act. California shows progress is possible, and we can’t let up the momentum now.