CHA News Article

Covered California 2018 Final Rates Released

Today, Covered California released final rates for the 2018 plan year, following its proposed 2018 rates for the individual market, released last July. The proposed rates included a statewide average rate change of 12.5 percent as well as a potential separate surcharge related to the lack of federal funding for cost-sharing reductions (CSRs). The surcharge averaged an additional 12.4 percent on Silver products, ranging from 8 to 27 percent across carriers. Covered California previously delayed the announcement of final rates, pending ongoing federal policy discussions and possible congressional action to fund CSRs. In the absence of a federal commitment to continue funding CSRs, Covered California plans will include the CSR surcharge on Silver-tier products for the upcoming year. Attached is a press release with more information about today’s announcement.

With this announcement, Covered California notes:

  • Most Covered California consumers will be protected from the added surcharge due to rising federal premium subsidies. Nearly four of five Covered California consumers receive federal subsidies to help them pay their premiums. Since the surcharge will only be applied to Silver-tier plans, the amount of federal subsidies eligible consumers receive will also rise. This means that most consumers who receive these subsidies will not see a change in what they pay for their insurance as a result of the surcharge, and many may see the amount they pay toward their premium go down because their subsidy amount will increase more than the surcharge. In 2018, nearly 60 percent of consumers eligible for subsidies will have access to Silver coverage for less than $100 per month – the same as in 2017 – and 74 percent can purchase Bronze coverage for less than $10 per month.   
  • Covered California enrollees who do not receive subsidies will have plan options that do not include the surcharge. Currently, Covered California has approximately 65,000 unsubsidized consumers enrolled in Silver plans. These consumers can avoid paying the surcharge by switching to a different metal tier or purchasing a nearly identical Silver plan that does not include the surcharge outside of Covered California. 
  • Shopping is important and can help consumers keep their coverage affordable. As with every renewal and open enrollment period, shopping is critical for consumers. While the statewide average rate change for 2018 is 12.5 percent, many consumers can limit the rate change to 3.3 percent if they switch to the lowest-cost plan in their same metal tier. Today’s announcement coincides with the launch of Covered California’s updated Shop and Compare tool, which consumers can use to compare their coverage options for 2018. Consumers will see the rates for the plans available to them in their area and find out if they qualify for financial assistance to help them pay for their coverage. 

Given the ongoing federal uncertainty over CSR funding, Covered California notes it has worked to ensure a stable market that preserves consumer choice and protects as many consumers as possible from increasing premiums. However, Covered California notes that federal action to fund CSRs is needed to preserve market stability, ensure continued carrier participation and keep premiums affordable. It also will reduce the amount of money spent by the federal government on subsidies for premiums. As federal policy discussions continue, Covered California states that it will continue to respond to consumer needs and inform policy discussions based on its experiences and lessons learned.

The renewal period for Covered California enrollees begins today, and open enrollment for those who currently do not have coverage will run from Nov. 1 through Jan. 31, 2018. Covered California indicates it will be working hard to ensure consumers are informed about their coverage options and available financial assistance. Consumer assistance is available at www.coveredca.com/get-help/.

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