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SACRAMENTO — Covered California announced its rates for 2017, and the hikes are steep. Covered California recipients will face a 13.2 percent jump on average.
Covered California had been one of the more successful exchanges when it came to keep rate hikes manageable. Rate payers had only seen 4 percent hikes over the last two years.
The state exchange couldn’t avoid large increases for 2017 as overall medical costs climb and two federal programs that help insurers with expensive claims expire this year.
Customers buying the silver plans will see a jump of 8.1 percent. Lower cost bronze plans will jump 3.9 percent.
Those who shop for other plans can reduce the price hike and, in some cases, can pay less than they are currently paying. Nearly 80 percent of customers will pay less or see a rate hike of no more than 5 percent if they switch plans. Subsidies, which 90 percent of Covered California customers get, will absorb much of the hike.
The amount of the hike will be impacted by a customer’s location and the kind of plan they have.
“Shopping is going to be more important this year than ever before,” Covered California Executive Director Peter V. Lee said. “Almost 80 percent of our consumers will either be able to pay less than they are paying now, or see their rates go up by no more than 5 percent, if they shop and buy the lowest-cost plan at their same benefit level. That’s the power of shopping.”
He said that the increases are not going to help improve insurers bottom line.
“Under the new rules of the Affordable Care Act, insurers face strict limits on the amount of profit they can make selling health insurance,” Lee said. “So, while all plans are experiencing different cost pressures, we can be confident their rate increases are directly linked to health care costs, not administration or profit, which averaged 1.5 percent across our contracted plans.”