Kaiser Permanente's lower rates on the California health exchange for 2015 may be meant to attract customers. (Ted Eytan/Flickr)
Kaiser Permanente’s lower rates on the California health exchange for 2015 may be meant to attract customers. (Ted Eytan/Flickr)

As all the other health insurers on California’s Obamacare exchange raise their rates for next year, Kaiser Permanente plans to lower them.

The Los Angeles Times reports that a new analysis by Citigroup shows Kaiser’s premiums dropping by 1.4 percent in 2015.

At the same time, the average premium across all plans on the Covered California exchange will rise 4.2 percent.

Citigroup health care analyst Carl McDonald told the Times he thinks Kaiser’s move is meant to draw customers:

Kaiser was among the most expensive health plans in 2014 and staggered to a fourth-place finish in exchange enrollment. Anthem Blue Cross was the leader statewide, followed by Blue Shield of California and Health Net Inc.

“Kaiser doesn’t seem particularly happy with its exchange market share, as it is the only company reducing exchange premiums in 2015,” McDonald said.

McDonald’s report predicts premiums for the other Covered California plans will rise as follows:

      Anthem Blue Cross: 4.6 percent
      Blue Shield: 6 percent

    Health Net: 4.9 percent

(Note that Kaiser’s plans on the exchange are different from its employer-based plans and typically have deductibles.)

Rates for Obamacare exchange plans are rising nationwide, too, but not to the level of the double-digit “sticker shock” forecast in Congressional debates last year, reports The Hill.

A new PricewaterhouseCoopers analysis shows the price of health plans on Obamacare exchanges will rise by an average of 7.5 percent next year.

It’s significant to note that the exchanges were meant to create a new, more competitive market for health insurance. And these rate changes give us a glimpse of the market forces at work. The Hill explains:

The healthcare law’s first enrollment period was a major test for the insurance industry, which set premium prices with little information about exactly who might sign up for coverage.

The 2015 rates shed light on how well their guesses panned out.

Companies are generally raising prices if their new customers are older, sicker or will use more medical care than projected.

Firms with a healthier pool, on the other hand, have an incentive to lower premiums.

State regulators still have to review and approve the California plan prices before enrollment opens on Nov. 15.

California Healthline contributed to this report.

On California Exchange, Only Kaiser’s Rates Will Go Down in 2015 15 August,2014Grace Rubenstein


Grace Rubenstein

Journalist and media producer specializing in public health, mental health and immigration. Multimedia editor at TED Books and regular contributor to KQED radio. Stories in various forms (words, photos, audio and video) have appeared in the Atlantic online, New York Times, Boston Globe, Sacramento Bee, and with the Center for Investigative Reporting. Fluent Spanish speaker (can’t resist a good salsa beat) and fourth-generation San Franciscan. Go Giants!

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