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 2018 open enrollment right around the corner, Covered California is gearing up for various open enrollment outreach activities, including a bus tour and mural art installation project called “Covered in Art.” The project will include murals painted on the exteriors of health facilities in various cities throughout the state. The goal is to create vibrant and permanent murals that bring the community together in support of health care and celebrate the importance of being “covered.” All murals will be painted professionally by local artists and will range from mid-sized to large-scale on building exteriors. The murals will be showcased with a public event at each mural site.
Hospitals or organizations interested in participating in the mural art project or providing an exterior wall for painting should contact Kelsey Caldwell at email@example.com or (916) 588-0485; or Patrick Dorsey at firstname.lastname@example.org or (909) 499-1972 by Friday, Sept. 29.
The California Department of Health Care Services (DHCS), in collaboration with Covered California and the California Department of Finance, last week issued an analysis outlining the impact the proposed Graham-Cassidy amendment would have on California. Calling the proposal “the most devastating of the three federal health care proposals… evaluated this year,” DHCS projects that California would lose $138.8 billion in federal funding from 2020 through 2027. Notably, the amendment would fundamentally change the federal-state partnership established by Medicaid 50 years ago by changing the program’s funding methodology to a per capita spending limit based on historical data.
DHCS’ most significant concerns include:
Shift in federal financing to per capita limit
Elimination of federal funding for expansion
Time-limited state block grant program
Elimination of enhanced funding for In-Home Supportive Services
One-year ban on Planned Parenthood participation in Medicaid
Elimination of hospital presumptive eligibility
Reduced levels of California’s provider fee on skilled-nursing and other long-term care facilities
According to DHCS, the amendment also concentrates the biggest cuts in states that expanded coverage, relying on federal promises of continued support. California, which saw the biggest reduction in its uninsured rate under the Affordable Care Act, would see the biggest cuts under Graham-Cassidy.
Covered California released a report this week about the critical role that marketing and outreach play in promoting a stable individual health insurance market and making coverage more affordable. The report, Marketing Matters: Lessons From California to Promote Stability and Lower Costs in the National and State Individual Insurance Markets, found that if the federally facilitated marketplace invested at a rate comparable to California — which devotes 1.4 percent of the marketplace’s total premiums to marketing and outreach — it would invest $480 million, which is more than 10 times what the federal government recently announced it would spend to promote enrollment for 2018.
According to the report, if the federally facilitated marketplace invested at this level over three years, it would likely result in 2.1 million more Americans enrolling or keeping their coverage, while decreasing premiums by an average of 3.2 percent, and generating a return on investment for the spending of about five to one.
Yesterday, Covered California for Small Business (CCSB) released its health plan choices and rates for the 2018 plan year. The weighted average rate change of 5.6 percent is less than last year and is slightly lower than the overall medical trend for small- and large-group business lines in California. CCSB will offer five plans in 2018, including two preferred provider organization plans with full provider networks from Blue Shield of California and Health Net; two health maintenance organization plans that are provider- and hospital-based from Kaiser Permanente and Sharp Health Plan; and Chinese Community Health Plan in San Francisco. CCSB will not offer Western Health Advantage in 2018, which will impact an estimated 350 consumers.
Currently, more than 35,000 individuals have insurance through CCSB, representing a growth of approximately 7,600 individuals for a 27 percent gain in membership over this time last year. CCSB also announced that next month it will launch enhanced web-based enrollment and renewal capabilities for customers, certified insurance agents and general agents.
At its meeting last week, the Covered California Board of Directors announced it would take three actions in an effort to stabilize the individual health insurance market and continue to provide consumers with choice and the lowest rates possible in the face of persistent national uncertainty. First, Covered California will wait until Sept. 30 to decide whether its health plans must add a cost-sharing reduction (CSR) surcharge to Silver-tier plans. In past years, the federal government reimbursed health insurance companies for those costs; that funding is now in question. If Congress and the President decide to fund CSRs by Sept. 30, rates for Silver-tier plans could move forward without the added CSR surcharge. If a decision is not made by Sept. 30, Covered California will implement its contingency plan in which the total premium would reflect the CSR surcharge for consumers with Silver-tier plans who receive subsidies.
However, Covered California reports that, in most cases, consumers would not see a “net” change in what they would pay since their premium tax credit would also increase. Last week, a report from the Congressional Budget Office found that ending the CSR reimbursements would raise premiums by about 20 percent in 2018 and 25 percent in 2020 and subsequent years. In addition, because the premium tax credit would rise along with the premiums, ending CSR reimbursements would increase the federal deficit by $194 billion over the next 10 years.
Today, Covered California released the attached proposed rates for the 2018 individual market, announcing that all 11 of its participating health insurance companies will return for the upcoming year. Covered California Executive Director Peter V. Lee said the average statewide rate change for 2018 will be a 12.5 percent increase, and noted that consumers can reduce that amount to less than a 3.3 percent increase if they shop for the best value and switch to the lowest-priced plan in the same metal tier. In addition, consumers will see federal subsidies rise, as they are tied to the price of the second-lowest-cost Silver plan. Those subsidies will help offset a significant portion of the rate change.
The rate change varies by health plan and region. Covered California notes that without the Affordable Care Act-mandated health insurance tax — a one-time increase of an average 2.8 percent — the average increase would have been less than 10 percent.
The California Department of Health Care Services (DHCS) and Covered California have released the attached quarterly report on eligibility and enrollment processes for all California insurance affordability programs, including Medi-Cal and qualified health plans (QHPs) available through Covered California. The report — required under AB X1-1 (Chapter 3, Statutes of 2013) — details pathways and outcomes for new applicants, including application sites, consumer assistance, applicant demographics, resulting eligibility determinations, plan enrollment choices, and the volume and outcome of eligibility appeals. It provides application, eligibility and enrollment data from July 1, 2016, through Sept. 30, 2016.
Last week, the Covered California board adopted a new policy to provide stability to the market and help reassure health insurance companies that have expressed concern about participating in 2018 in the face of continued uncertainty over the federal government’s funding of cost-sharing reduction (CSR) reimbursements.
Earlier this year, the federal government committed to funding CSRs through May 2017, with no guarantee it will continue. In the absence of a clear and reliable policy from the federal government that it will provide CSR funding through 2018, Covered California’s board acted to place any rate increases caused by the uncertainty onto Silver plans. For advanced premium tax credit (APTC) recipients, the amount spent on premiums is a percentage of income based on the second lowest Silver plan in their service area, no matter how much the premium costs. If premiums go up as CSRs are built into the cost of the Silver qualified health plan, consumers should be insulated as the additional costs will be covered by APTCs. While Silver level consumers will see an increase in the gross cost of their premiums, they will also see an increase in the amount of financial assistance they receive, leaving their net payment virtually the same. In addition, Covered California will require plans to offer a separately rated, non-mirrored Silver plan off exchange that is nearly identical to the Covered California patient-centered benefit design. These plans would not include any premium increase connected to the lack of CSR reimbursements and should mitigate the impact of any rate increases on approximately 1 million unsubsidized consumers.
A new analysis of Covered California’s enrollment shows that California’s risk score improved from 2016 to 2017, indicating a healthier mix of enrollees. The study, conducted by Health Affairs, combined Office of Statewide Health Planning and Development data with data from Covered California’s enrollment system to determine standardized risk scores. Overall, in the one-year period studied, six carriers’ risk scores declined, while one stayed the same and four increased. Statewide, the risk score declined from 1.11 in 2016 to 1.09 in 2017, indicative of a healthier population with respect to chronic conditions. According to the report, Covered California enrollment remains strong and stable despite uncertainty about health care coverage at the federal level.
Covered California has released a report that examines how Covered California enrollees, and to a degree those who purchase their health care coverage off-exchange, benefit from lower costs through advanced premium tax credits, cost sharing reductions and a healthy mix of consumers. The report data examine the 2016 coverage year, in which a total of approximately 1.7 million consumers obtained health care coverage for at least one month through Covered California. The report details how much financial help consumers received through tax credits, which are adjusted based on age, income, region and household size.
Key report findings reveal:
Covered California enrollees benefited from $4.2 billion in tax credits and over $700 million in subsidies to reduce costs at the point of care (cost sharing reductions) in 2016.
Covered California released a new analysis that details how consumers could be impacted by the changes in financial assistance proposed under the American Health Care Act (AHCA). The latest figures account for the recent Congressional Budget Office (CBO) analysis and examine how consumers would be affected in all 19 of California’s rating regions for non-group coverage. The CBO examined the AHCA and determined that health insurance premiums would be 15 to 20 percent higher in 2018 and 2019 than they would be under existing law, and its proposed tax credits would be 60 percent of that provided under the current law.
The examples compare the financial help that consumers would receive in 2020 based on the current Affordable Care Act (ACA) subsidies — which consider a consumer’s age, income, family size and where they live — to the AHCA’s proposed age-based subsidies.
Covered California has issued a draft updated essential community provider (ECP) reference list for public comment through close of business on March 16. Covered California has indicated that its draft list is an attempt to create a single, non-duplicated list of ECPs who serve low-income and medically underserved communities in provider networks offered by its qualified health plans. The federal 340B list, while a critical category of ECPs, does not constitute the sole source of such entities because some provider organizations that serve the low-income and medically underserved population are not 340Bs, including some that qualify as Health and Safety Code Section 1204(a) entities under California law. Organizations that believe they should be considered an ECP but are not listed should contact Covered California. Conversely, if an organization is included on this list and believes it does not qualify as an ECP, it should inform Covered California.
To submit comments directly to Covered California, email them to ProviderDirectory@Covered.CA.gov noting “ECP 2018” in the subject line. To submit feedback on the draft ECP list to CHA, email Amber Kemp, vice president, health care coverage, by close of business on March 13.
The attached report from Covered California examines implications of Affordable Care Act (ACA) repeal on Californians who have benefited and continue to benefit from the law. By monitoring and reviewing not only the effect of proposed policies to repeal the ACA, but also the impact of the policies’ timing, Covered California concludes that coverage and premiums would be negatively affected; revenue for hospitals, integrated delivery systems, physicians and other providers would immediately and significantly drop; jobs and the economy would be substantially impacted, with California projected to lose between 209,000 and 334,000 jobs; and, potentially, the individual health insurance marketplace would collapse.
In its review, Covered California urges policy proposals advancing a replacement for the ACA to account for the significant transition from one health care financing mechanism to another, and to allow time for any necessary complementary state legislative action.
Covered California has released the attached report modeling premium increases that could occur if the federal cost-sharing reduction (CSR) subsidies were defunded, requiring health plans to build these costs into their rates. Using actuarial value calculations, Covered California calculated a 16.6 percent increase in gross premiums across all Silver plans. Covered California then modeled the consumer reaction to this adjustment and the resultant changes in enrollment, metal tier market shares, gross and net premiums, and advanced premium tax credit in both the exchange and off-exchange markets. Overall, modeling suggested that consumers who currently benefit from subsidies would shift to non-Silver metal tier plans, primarily Bronze, and that enrollment in Covered California would rise slightly. These effects vary by federal poverty level group, with larger shifts from Silver among high-income consumers. Off-exchange enrollment is projected to decrease slightly, which would increase the federal cost by approximately $226 million, or 29 percent, for the same consumer benefit.
Covered California has released the attached report analyzing attitudes toward enrolling in and renewing health insurance coverage following the 2016 election. The study, An Integrated Quantitative and Qualitative Study on Post-Election Attitudes Toward Enrolling in and Renewing Health Insurance Coverage, was conducted between Dec. 14, 2016, and Jan. 3, 2017, to evaluate whether to adjust Covered California’s marketing and outreach messaging. The research, which included focus-group testing and an online survey of 500 respondents, was conducted by Greenberg Strategy.
Covered California’s research was conducted in two parts: an online survey focused on sentiment and concerns, and focus groups with uninsured participants that also included discussions on barriers to enrollment.
A recent study by The Commonwealth Fund analyzes health plan premium growth in California’s insurance marketplaces, focusing on the policies consumers purchased, and finds that the average price paid for plans selected in 2014 was 11.6 percent less than the average price of all plans offered by insurers. The report notes that similar differences were observed in 2015 and 2016, suggesting that consumers are choosing to purchase lower-cost plans and that even small increases in plans’ premiums appear to significantly reduce the probability that consumers will select those plans.
The report’s key findings include:
For every plan metal tier (bronze, silver, gold and platinum), average purchase prices were lower than average offer prices for the years 2014–16. In 2014, the average purchase price for all plans was 11.6 percent less than the average offer price; in 2015, it was 13.2 percent less; and in 2016, it was 15.2 percent less.
The California Healthcare Foundation (CHCF) has produced an interactive map of California showing how many people have purchased health insurance coverage through Covered California by zip code (the map does not include those who receive coverage through the expansion of Medi-Cal). Approximately 1.4 million Californians bought insurance through Covered California in 2016.
According to CHCF, California has more than 2,300 zip codes, and those with highest Covered California enrollment are:
A recently released report from the Kaiser Family Foundation examines 2017 premiums and insurer participation made available through Healthcare.gov, along with data from state-run exchange sites. Health insurance premiums in the Affordable Care Act’s (ACA) marketplaces are expected to increase faster in 2017 than in previous years due to a combination of factors, including substantial losses experienced by many insurers in the market and the phasing out of the ACA’s reinsurance program.
The report examines the second-lowest cost silver plan, as it is one of the most popular plan choices and is the benchmark to determine the amount of financial assistance individuals and families receive. In California, the second-lowest cost silver premium for a 40-year-old non-smoker in 2016 was $245 in Los Angeles and increased to $258 in 2017 – representing a 5 percent change from 2016 – before accounting for the tax credit.