Covered California posts rates for 2019

By: Submitted to the Journal
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Covered California announced the proposed health insurance rates for 2019 that will average single digits increase on July 19. The comparatively modest 8.7 percent average rate change, which some health care analysts expected to be in the high double-digits, is a testament to vigorous rate negotiations with insurance companies and a mix of healthy enrollees in the Covered California exchange, agency’s Executive Director Peter V. Lee said in a press release.
“Covered California continues to benefit millions of people in our state by giving them access to high-quality, affordable health coverage,” Lee said. “It is unfortunate when a rate change of nearly 9 percent is generally viewed as good news, when the rate change could — and should — have been much lower.”
Lee said many enrollees will be able to mitigate the impact if they shop and switch to the lowest-cost plan in the same metal tier. 
Consumers in both Covered California and off-exchange in the individual market will see an overall average statewide rate increase of 8.7 percent to their gross premiums if they renew coverage in the same plan for 2019.
The proposed rates, subject to a final review by state regulators, mean those who receive a subsidy to help purchase coverage will pay an average of 6 percent more if they renew in the same plan next year, which translates to an estimated monthly premium of $123 after tax credits. Subsidized consumers account for 88 percent of Covered California’s enrollment, and those subsidies rise along with rates to help offset any increases.
The average rate change for consumers who shop and switch to the lowest-cost plan in the same metal tier is -0.7 percent, which means that many Californians can pay the same rate as they do now in 2018, or a little less, if they shop and switch.
Lee said the elimination of the penalty for those who choose not to buy health insurance had a negative impact on rates for 2019. Carriers added between 2.5 and 6 percent to their rates, with an average of 3.5 percent, due to concerns that the removal of the penalty will lead to a less healthy and costlier consumer pool.