Covered California Health Plan to hike rates 13.2%

Policyholders of Covered California Health Plan will face an average 13.2 percent increase to their rates next year in the individual market, another sign that California's two-year reprieve from double-digit rate increases is coming to an end.

Covered California Executive Director Peter Lee said the increases are a result of rising medical cost and the end of an Affordable Care Act funding mechanism designed to moderate rate increases during the law's first three years.

"Under the new rules of the Affordable Care Act, insurers face strict limits on the amount of profit they can make selling health insurance," Mr. Lee said in a release. “We can be confident their rate increases are directly linked to healthcare costs, not administration or profit, which averaged 1.5 percent across our contracted plans."

Members will receive notices in October concerning rates, with options to continue plans and face the increases or change plans. Roughly 90 percent of Covered California enrollees receive subsides via the ACA, according to the release.

Rates will vary statewide by region and insurance company. Hikes from the two largest insurers include Chico-based Blue Shield of California — increasing rates an average 19 percent — and Indianapolis-based Anthem — increasing rates an average 17.2 percent,— according to Kaiser Health News.

More articles about payer issues:
UnitedHealth's surprising 2Q earnings powered by Optum: 4 things to know
Coalitions call on Missouri governor to halt managed care expansion
10 states with the costliest employer-sponsored health insurance

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