Covered California announced a statewide weighted average increase of 13.2% for 2017, which is due in part to the loss of the federal reinsurance program and the high cost of specialty drugs.
Millions of previously uninsured Californians now have health care coverage because of the Affordable Care Act, but containing health care costs remains a challenge. While I am disappointed by this news, the rate increases are driven by the rise in underlying medical costs. It’s important to remember that prior to the enactment of the ACA, double-digit premium increases were the norm. To help with the transition toward full coverage for all Americans, the ACA included a mechanism to smooth out price fluctuation in the first few years. That mechanism is going away, which is part of the reason we are seeing this level of rate increases. However, with all of the choices consumers have through Covered California, individuals who experience large increases will likely be able to find a competing plan with a lower rate increase.