Covered California, the Golden State’s public health insurance exchange, announced its rates for 2016 last week. It also unveiled new insurers that will be taking part in the state’s health insurance marketplace when Affordable Care Act (ACA) open enrollment begins November 1, 2015, for coverage in 2016.
The statewide weighted average premium increase for 2016 will be four percent, which is slightly lower than last year’s increase. It represents a dramatic change from the trends individuals faced in the years before the ACA was enacted in 2010. Two new insurers, UnitedHealth Group and New York start-up Oscar, will be joining the state health exchange, too, although in limited markets.
“This is another year of good news for California’s consumers and further evidence that the Affordable Care Act is working,” said Covered California Executive Director Peter V. Lee. “Covered California is holding the line on rates and keeping coverage within reach of hundreds of thousands of consumers, while giving them more choices than ever before.”
The majority of buyers through Covered California will either see a decrease in their health insurance premiums or an increase of less than five percent, if they choose to keep their current plan. The new pricing gives consumers the opportunity to reduce their premiums by an average of 4.5 percent, and more than 10 percent in some regions, if they shop around and change to a lower-cost plan within the same ACA metal tier.
Last week’s announcement continues a downward trend of rate increases in California. Prior to the ACA, annual double-digit rate increases were common in the state’s individual health insurance market. Negotiated rates for the state health insurance marketplace for 2014 were significantly lower than many experts predicted, and the weighted average increase last year was a fraction of historical trends. Because Covered California requires health insurance carriers to offer the same products at the same prices both inside and outside the state marketplace, all individuals seeking to buy health insurance benefit from the new rates.