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.