Premiums for the state’s 1.3 million Covered California consumers will rise an average 4 percent, officials with the agency said Monday.  This increase is slightly less than last year’s increase of 4.2 percent.

“This is another year of good news for California’s consumers and further evidence that the Affordable Care Act is working,” said Covered California executive director Peter Lee.

Consumers who live in different parts of the state will see varying rates. In Southern California, consumers who stay in their plan will see an increase of just 1.8 percent, or an average $296 per month, but in Northern California, where health care costs are typically higher due to greater consolidation among doctors and hospitals, the increase is an average 7 percent, or a monthly $384.

In the Santa Cruz area specifically, premiums will rise 13 percent. Peter Lee blamed providers focused on their bottom line.

“Is it the case that health care really costs that much more in Santa Cruz and Monterey? Are people sicker? I don’t think so,” Lee said. “I’ve seen folks surfing in Santa Cruz; they look pretty healthy. (The increase) is not because of the health plans, it’s because of the underlying delivery system.”

On the flip side, some consumers could see their premiums go down, if they choose to shop around.

“Health care is also local. Where you live frames what your options are,” Lee said. “If you live in Los Angeles and you shop around, you could see your premiums go down 11 percent.”

Betsy Imholz with Consumers Union, an advocacy group, called the average increase “terrific” and also encouraged people to shop on price. “Often you can get a lower rate by moving to another carrier,” she said.

Lee said Covered California spent weeks negotiating with insurers, part of the “active purchaser” model in the state’s marketplace.

“We’ve created a market where the consumer drives what’s working in California,” he said. “Throughout our negotiations, consumers in California saved more than $200 million.”

Larry Levitt, senior vice president of the nonpartisan Kaiser Family Foundation, was positive about the “modest” increases. “This shows what a stable, competitive individual insurance market can look like,” he said via email. 

In part, Levitt credited the cost containment to Covered California’s “substantial enrollment so far.” It’s a sign, he said, that the marketplace is likely attracting healthy people to help spread the risk of sicker enrollees.

Levitt said the agency’s role as an active purchaser helps keep premium increases down. “I think a key element of California’s success is the standardization of insurance policies, which simplifies the choices for consumers and focuses competition squarely on premiums,” he said.

Not many states have publicly announced their rate data yet, Levitt said. But of those that have released at least some data, California appears to be “a little bit better than average,” Levitt said.

Covered California also announced that two new insurers will join the marketplace. UnitedHealthcare, the largest health insurer in the country, will offer plans in some parts of the state, including the counties that start north of Sacramento and stretch to the Oregon and Nevada borders. Where some people had a choice of only one plan, now they will have two or three.

“Covered California did the right thing by targeting the new additions to the places where more choice is needed,” Imholz said.

Under the UnitedHealthcare plan, people who live near the Oregon and Nevada borders will also be able to cross state lines to see a doctor, a practice that was often prohibited in other plans.

“Sometimes people were driving many hours in order to get care,” said Beth Capell, an advocate with Health Access. People who live in Susanville, for example, were accustomed to getting care in nearby Reno, Nevada. But through Covered California, they had to drive several hours to Sacramento. “They will now have the choice of another carrier that will be offering them coverage beyond the borders of California.”

UnitedHealthcare will also offer plans in Santa Cruz, San Benito and Monterey counties, as well as several Central Valley counties.

Parts of Los Angeles County and Orange County will see new insurer Oscar Health Plan of California, which currently sells insurance only in two states, New York and New Jersey.

In a call with reporters, representatives of both companies stressed technology tools that could help consumers get better care.

Lee said that new additions to the marketplace were chosen  because they have good networks and are good for consumers.

“Covered California does not think more plans are always better. In 2014 and 2015 we turned plans away,” he said. “We’re not adding plans just because they knock on our door.”

In addition to the two new plans, all plans from last year were renewed for 2016: Anthem Blue Cross, Blue Shield, Chinese Community Health Plan, Health Net, Kaiser, Molina Healthcare, Sharp Health Plan, Valley Health Plan, LA Care Health Plan and Western Health Advantage.

The rates announced Monday are preliminary and will be reviewed by state regulators over the next 60 days.

Covered California 2016 Premiums to Increase Modestly 28 July,2015Lisa Aliferis

  • lookout1

    Seems the article left out the part where bronze plan deductibles are up 30% .. Now only 6250!!!


Lisa Aliferis

Lisa Aliferis is the founding editor of KQED’s State of Health blog. Since 2011, she’s been writing and editing stories for the site. Before taking up blogging, she toiled for many years (more than we can count) producing health stories for television, including Dateline NBC and San Francisco’s CBS affiliate, KPIX-TV. She also wrote up a handy guide to the Affordable Care Act, especially for Californians. Her work has been honored for many awards. Most recently she was a finalist for “Best Topical Reporting” from the Online News Association. You can follow her on Twitter: @laliferis


April Dembosky

April Dembosky is the health reporter for The California Report and KQED News. She covers health policy and public health, and has reported extensively on the economics of health care, the roll-out of the Affordable Care Act in California, mental health and end-of-life issues.

Her work is regularly rebroadcast on NPR and has been recognized with awards from the Society for Professional Journalists (for sports reporting), and the Association of Health Care Journalists (for a story about pediatric hospice). Her hour-long radio documentary about home funerals won the Best New Artist award from the Third Coast International Audio Festival in 2009.

April occasionally moonlights on the arts beat, covering music and dance. Her story about the first symphony orchestra at Burning Man won the award for Best Use of Sound from the Public Radio News Directors Inc.

Before joining KQED in 2013, April covered technology and Silicon Valley for The Financial Times, and freelanced for Marketplace and The New York Times. She is a graduate of the University of California at Berkeley Graduate School of Journalism and Smith College.

State of Health Sponsored by

Become a KQED sponsor