CHA News Article

Health Status of Enrollees Is Key to California’s Individual Market Stability

According to a new analysis, California’s consumer pool is healthier than the national average, resulting in more stable rates and enrollment. Titled “National vs. California Comparison: Detailed Data Help Explain the Risk Differences Which Drive Covered California’s Success,” the study was released last week in Health Affairs. Key findings include:

  • California’s individual market risk score is about 20 percent lower than the other states’ average risk score from 2015 through 2017.
  • Covered California’s risk scores are lower than the national average across every metal tier for each of the three years examined.
  • California’s off-exchange enrollment remained relatively constant from 2015 to 2017, while the rest of the nation’s off-exchange enrollment decreased substantially during the same period. This enrollment represents consumers who enroll outside of state-based exchanges but generally get the same products at the same prices, but without the benefit of a federal subsidy. Because off-exchange enrollees tend to be healthier than average and do not have the federal tax credit to make coverage more affordable, the stability of this enrollment in California is beneficial.

The study pointed to four key reasons for California’s success in attracting and retaining a healthier mix of consumers:

  • California expanded its Medicaid program, known as Medi-Cal, and studies show that states that expanded Medicaid coverage have lower risk scores.
  • States that established their own marketplace, such as Covered California, have lower risk scores than states that rely on the federal marketplace.
  • Covered California and other state-based exchanges tend to invest more in marketing and outreach, which are critical to enrolling new consumers.
  • Covered California’s patient-centered benefit designs, which are standard across plans in each metal tier, help reduce consumer confusion.

According to Covered California, the report provides additional evidence to support state and federal investments in marketing and outreach that promote enrollment, which result in lower costs for middle class Americans who do not receive subsidies.