Californians got a double dose of good health care news late last month. The number of Californians who have trouble finding a doctor or paying their medical bills has sharply declined since the Affordable Care Act took effect. And premiums charged by private insurers have risen only modestly, contrary to warnings that insurers were likely to get double-digit premium increases.
In its latest survey tracking the experiences of California’s previously uninsured residents, the Kaiser Family Foundation reported that two-thirds of the uninsured had gained coverage through various programs, including the state’s Medicaid plan, employer-sponsored insurance and private policies bought on the new insurance exchange established by the state under the Affordable Care Act.
Those who remain uninsured in California rank health care costs as their top financial challenge, with 85 percent saying health insurance is difficult to afford, more than housing, gas or utilities. Among the recently insured, health care ranked fourth on their list of economic concerns, behind housing, utilities, and gas.
Meanwhile, Covered California, the state agency that runs the insurance exchange, announced that the average premium would rise only 4 percent next year, slightly less than the 4.2 percent increase for the current year.
California officials attributed the low rates to having a large number of enrollees (more than 1.3 million) in relatively good health, defying predictions that only the old and the sick would sign up. The state also benefited from a law giving the exchange power to decide which insurers can sell policies, which gives it leverage to demand lower rates. Since all insurers are required to provide a standard array of benefits and cost-sharing for various levels of coverage, consumers can focus on the two other issues of greatest concern: the price of the plan and whether it includes their preferred doctors.
Covered California said that premiums will vary significantly from one area to another (the average premium for an insurance plan in Southern California will be $296 a month; in Northern California, premiums will average $384 a month). Limited competition among doctors and hospitals as a result of consolidation is pushing premiums up in some areas; in parts of Northern California,the average rate increase next year will be 12.8 percent, largely because of those forces.
California is one of the few states that actively negotiates prices with insurers. But under the act, any state can demand that insurers justify big rate increases, a tactic that may cause some to trim back. Consumers need to pressure state insurance commissioners to get as tough as they can.
Date: August 10, 2015