July 31 Healthcare premiums will rise an average
of 4.2 percent in 2015 on California's Obamacare insurance
exchange, the largest of the state marketplaces established by
President Barack Obama's healthcare reform, state officials said
Ten companies will sell plans for 2015 through Covered
California, three fewer than this year, said the exchange's
Executive Director Peter Lee.
Opponents of Obama's healthcare reform, the 2010 Affordable
Care Act, have warned for months that 2015 premiums would soar
due to the high medical costs of the first wave of enrollees
who, they claimed, are older and sicker than the general
In California, however, insurers' projections of 2014
medical spending were fairly accurate. One of the largest
insurers, WellPoint Inc, said this week that because its
2014 premiums matched medical costs it had generally proposed
smaller increases than competitors.
California is the largest of about a dozen states to
announce proposed 2015 rates. Each state's insurance department
or other agency must approved premiums.
Most increases are in the mid-single digits, Andy Slavitt,
principal deputy commissioner of lead Obamacare agency the
Centers for Medicare and Medicaid Services (CMS), told Congress
An analysis by the non-profit research and advocacy group
FamiliesUSA found that proposed 2015 premiums varied widely from
state to state and even within states. One Colorado plan has a
22 percent decrease while another has a 17.5 percent increase,
for instance. In Indiana proposed rates vary from a 3 percent
drop to a 35 percent rise.
Overall, proposed premiums fell for at least one plan in
nine of the 12 states, FamiliesUSA said.
If the California premiums are approved, 16 percent of
customers would see the same or lower premiums for their current
plan, one-third would see an increase of up to 5 percent,
one-third would pay 5 to 8 percent more, and 13 percent would
pay 8 percent more. Consumers should shop around rather than
automatically renew, said Lee of Covered California.
One way California insurers have kept a rein on spending was
by establishing "narrow networks," covering healthcare received
at a limited number of doctors and hospitals. That has triggered
lawsuits against Anthem Blue Cross, a division of WellPoint and
the largest Obamacare carrier in California, by policy holders
claiming they were misled about where they could obtain care.
Also, the state did not let people keep plans that did not
comply with Obamacare standards. As a result, California got an
influx of healthy people that left the state well positioned for
modest premium increases, said healthcare policy expert Larry
Levitt of the Kaiser Family Foundation.
The 2014 insurers not returning in 2015 specialize in
Medicaid plans and could not meet new requirements, Lee said.
In the first open-enrollment period, 1.4 million people
bought policies on Covered California, compared with 8 million
nationally. The next enrollment period begins Nov. 15.
(Reporting by Sharon Begley and Caroline Humer in New York;
Editing by Lisa Shumaker)