Covered California rates to increase 4% in 2016

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SACRAMENTO – Defying dire predictions about health insurance rate shock across the country, California’s Obamacare exchange negotiated a 4% average rate increase for the second year in a row.

The modest increase for 2016, announced Monday, may be welcome news for many of the 1.3 million Californians who buy individual policies through the state marketplace, known as Covered California.

California’s rates are a key barometer of how the Affordable Care Act is working nationwide, and the state’s performance is sure to be hotly debated among supporters and foes of the healthcare law, including the current crop of presidential candidates.

Outside California, critics of Obamacare have seized on the fact that major insurers in several states have sought rate hikes of 20% to 40%.

Peter Lee, executive director of Covered California and a former Obama administration official, said he relished the opportunity to prove that the healthcare law is working well.

“We have Chicken Littles who keep saying the sky is falling tomorrow and rates will skyrocket through the roof,” Lee said in an interview.

“This proves them totally wrong. For the second year in a row, Covered California has delivered premium increases dramatically below the rates we have seen historically in the individual market,” he added.

But he acknowledged that the state has plenty of unfinished business and that some families will face hefty rate hikes.

About 30,000 people, or 2% of enrollees, will see their premiums increase in excess of 15% if they don’t change health plans.

Overall, 44% of Covered California customers said they find it difficult to pay their monthly premiums now. And some people have indicated they feel shortchanged in terms of the doctors they can see and the service they get from their health insurer or the exchange when problems arise.

Read more of Chad Terhune’s story at Los Angeles Times.

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