Dive Brief:
- Covered California officials announced on Monday that premiums for health plans on the state exchange will go up by an average of 4% next year, pending rate reviews by state regulators.
- That 4% average for 2016 is a bit lower than the average increase from 2015, which was 4.2%.
- The announcement has garnered primarily positive feedback for the small size of the increase.
Dive Insight:
While the average premium change looks modest, the impact on individual plans is highly varied and will range across the state from a 10% decrease to a 23% increase, reports to Larry Levitt of the Kaiser Family Foundation.
Experts note that rates will vary by region, and premiums are said to be about $200 million less than what insurers originally sought.
Among those praising the announcement was the Consumers Union, which stated that "this relatively small jump means California made sound decisions in establishing the structure and powers of the exchange and requirement that all plans meet Affordable Care Act standards."
An opposing view from Virginia healthcare consultant Robert Laszewski suggests that California officials may be keeping premiums too low in order to boost enrollment. "Tough regulation can put off the real costs, but it can't do it forever," he told the Los Angeles Times.