California to Increase Marketplace Premiums by an Average 13.2%

Covered California, the state’s Affordable Care Act marketplace, announced an average premium increase of 13.2% for 2017’s open enrollment period.

In past years, California only increased rates by an average of 4%, but the rising cost of providing healthcare is causing them to join other states who announced double digit premium increases, according to Kaiser Health News. This increase will affect approximately 1.4 million enrollees in California.

The larger than usual increase was driven by Blue Shield of California and Anthem, who increased their premiums 19.9% and 17.2%, respectively.

“This increase is a little higher than expected, since California did not seem to have the underpricing that plagued other markets,” Kathy Hempstead, director of health coverage issues at the Robert Wood Johnson Foundation told Kaiser. “California also seemed to have a healthier population than many other states.”

Covered California executives said these increases are not because of attempts from the insurers to be more profitable.

“Under the new rules of the Affordable Care Act, insurers face strict limits on the amount of profit they can make selling health insurance,” said Peter Lee, Covered California’s executive director. “We can be confident their rate increases are directly linked to health care costs, not administration or profit, which averaged 1.5% across our contracted plans.”

Lee added that increasing costs is largely due to expensive specialty drugs, such as cancer treatments.

Premiums are increasing as low as 8.4% in San Joaquin, Stanislaus, Merced, Mariposa, and Tulare counties. They can also be as high as 28.6% in Monterey, San Benito, and Santa Cruz counties, according to Kaiser.

However, Californians can still shop for alternative plans, such as lower-cost silver plans, and some may even qualify for subsides to make their premiums even lower.