CHA News Article

Covered California Releases 2019 Rates

Today, Covered California released information on rates and carrier participation for the 2019 plan year, announcing that the weighted average statewide rate will rise by 8.7 percent, lower than in previous years. The price of coverage will vary by health plan and region, as outlined in Table 2 of the attached press release. Additionally, all 11 health insurance carriers will return in 2019. The vast majority of consumers — 96 percent — will be able to choose from two or more health insurance companies, while 82 percent will be able to choose from three or more. Covered California notes that consumers who shop and switch to the lowest-priced plan in the same metal tier could see an average rate change of negative 0.7 percent. 

Although the statewide rate change will be 8.7 percent, Covered California enrollees who receive federal financial assistance to pay their premiums — accounting for 88 percent of Covered California’s enrollment —  will pay an average of only 6 percent more next year, because federal premium assistance rises along with rates. 

Carriers added between 2.5 and 6 percent to their rates for 2019, for an average of 3.5 percent, in response to concerns that eliminating the individual mandate penalty would lead to a less healthy and costlier consumer risk pool. Covered California estimates the 3.5 percent average increase added to the rates will increase Californians’ spending on their health care coverage by more than $400 million in 2019. Subsidized consumers will be protected from this increase, and because the amount of financial help they receive will also increase, the federal government will pay an estimated $250 million more in higher tax credits. Unsubsidized consumers both on and off the exchange will bear the full brunt of the increase. 

Covered California notes that some federal changes will affect more than just rates next year. Notably, eliminating the individual mandate penalty could reduce enrollment in California’s individual market by 262,000 consumers in 2019. Analysis conducted by PricewaterhouseCoopers found that removing the individual mandate penalty could also result in uncompensated care rising by $1,000 per newly uninsured person. If all uncompensated care costs — those not covered elsewhere — were shifted to private insurance, the cost of employer-sponsored coverage could increase by between 2 and 4 percent, a cost that would most likely be shared between the employer and the employee.

Covered California notes it remains a strong and stable marketplace that has served more than 3.5 million Californians since it first began offering coverage in 2014. During that time, more than 5 million Californians have enrolled in the expanded Medi-Cal program. Together, these achievements have helped California reduce its uninsured rate from 17 percent at the end of 2013 to a record low of 6.8 percent at the end of 2017. The historic gains made through steady enrollment have helped keep Covered California’s premiums at a stable level. Over the past five years, Covered California has held actual average annual rate changes for unsubsidized consumers to an estimated average of 7.9 percent and 3.8 percent for subsidized consumers. Covered California’s steady enrollment further helps stabilize rates because its consumers are healthier than average, as measured by risk scores. A recent analysis published in Health Affairs found that Covered California’s risk scores were lower than the national average from 2015 to 2017.

Covered California’s 2019 Rate Book provides more specific information related to rates and carrier participation by pricing region. When it is released, CHA will share it in CHA News

The rates announced today were also filed with California’s health insurance regulators — the Department of Managed Health Care and the California Department of Insurance — which will begin their rate reviews.

Consumers will have access to their individual premium for 2019 during renewal in October, when they can visit the Covered California website and begin using the 2019 “Shop and Compare” tool. Consumers who do not have health insurance can begin signing up for 2019 coverage on Oct. 15. Others with special qualifying life events, like losing their coverage or moving, can enroll year-round. Medi-Cal enrollment is also available year-round.