Dive Brief:
- In 2016, health insurance rates will rise around 4% on average in California.
- Insurers in some other states have requested rate hikes of 10% to 40%; some have even asked for more.
- According to state officials, California is one of only a few states to actively negotiate premiums with insurers.
Dive Insight:
According to The New York Times, some insurers have said new customers obtained under the Affordable Care Act (ACA) turned out to be sicker than they expected; others have reported losses on insurance exchange customers, saying that claims paid out exceeded income from premiums.
Peter Lee, Executive Director of California's insurance exchange, told the Times that California has benefitted from a large number of enrollees who are in relatively good health.
Lee also called the California exchange an "active purchaser," which means it chooses the plans that participate in its exchange and then negotiates premiums. He said most other states and the federal marketplace “allow any insurers to sell whichever products they wish to sell on the exchange.”
Kevin Counihan, the chief executive of the federal insurance marketplace, told the Times that the California rates show that “the Affordable Care Act is working as intended to spur competition and transparency in the marketplaces, keeping premium increases low and leading to affordable new choices for consumers.”