California’s exchange premiums will increase 13.2% in 2017

California’s Affordable Care Act marketplace premiums will increase 13.2 percent in 2017, Covered California announced. However, exchange officials insist that switching plans could temper the impact for consumers.

The average increase is a significant jump from the previous two years, in which the California premiums never increased more than 4.2 percent. The double-digit jump is likely to reverberate through the healthcare industry since California’s exchange is widely viewed as an ACA success story. But it also reflects a growing worry about exchange plan affordability, as insurers around the country have requested hefty premium hikes in 2017.

According to Covered California, premium hikes are driven by a variety of factors: Conclusion of the reinsurance program, the impact of special enrollment, the high cost of specialty drugs and higher demand for healthcare services. However, Covered California Executive Director Peter Lee noted that despite the average statewide increase, the majority of consumers will pay lower premiums or see a marginal increase simply by shopping for the “lowest-cost plan at their same benefit level.”

“This is a new era of healthcare, where the consumer is in the driver’s seat with the power to look easily for a better deal, and where subsidies help absorb the impact of rate changes,” he said. “These options did not exist before the Affordable Care Act.”

Blue Shield of California and Anthem, the two largest insurers in the state, will have the highest state-wide premium increase with 19.9 percent and 17.2 percent, respectively, according to Kaiser Health News. The premium spikes are likely to fuel debate over President Barack Obama’s healthcare law in the buildup to the November election.

Previous analysis of proposed exchange premiums across the country shows wide variations, from a 44 percent increase in Vermont to 5 percent in Washington. Although tax credits offered through the ACA are likely to soften the blow for low- to moderate-income consumers, affordability within exchange plans is still a concern.

- read the Covered California release
- here’s the KHN article