Northern Californians will pay $88 more in average monthly health care premiums than Southern California consumers, under new 2016 rates announced Monday by Covered California, the state’s official health care marketplace under the Affordable Care Act.
Statewide, Covered California officials trumpeted an average 2016 weighted premium increase of 4 percent, compared with 4.2 percent this year. The rates are preliminary, pending review by state regulators.
On average, Northern Californians will see a 7 percent increase in 2016 premiums, compared with a 1.8 percent increase in the state’s southern half. An average 40-year-old individual in a midrange Silver plan will pay $384 in the state’s north versus $296 in the south, according to Covered California.
In the four-county Sacramento region, where 78,000 individuals were signed up for coverage in 2015, the increase will be 8.2 percent.
Why the geographic difference?
“Provider competition is based on where you live. It’s a key driver,” said Covered California spokesman Roy Kennedy. “In Southern California, where there are more providers and greater competition, the weighted average is 1.8 percent. It’s not news. … It was true before there was (Covered California).”
In Monday’s announcement, Covered California director Peter Lee said the state’s 1.3 million covered adults and children are a diverse, healthier population, which has helped keep overall rates down. The state is somewhat unique in that it negotiates directly with health care providers, which gives it more leverage.
Now in its third year, Covered California is the country’s biggest health care exchange under the Affordable Care Act, which launched mandatory health care coverage for all Americans in 2014.
Covered California also said Monday that two new insurers will offer 2016 health plans: UnitedHealthcare Benefits Plan (whose Northern California coverage area includes Amador, Butte, Calaveras, Sutter, Yolo and other counties) and Oscar Health Plan (serving Orange and parts of Los Angeles counties). The 10 other current Covered California health care providers – such as Anthem, Blue Shield and Kaiser Permanente – will remain.
In almost every zip code, consumers have anywhere from three to seven carriers from which to choose. As before, health plans are ranked in metal tiers: Platinum (costliest), Gold, Silver and Bronze (cheapest), with a varying range of coverages and premiums.
Despite the 4 percent increase statewide, some consumers will face double-digit increases in premiums if they want to keep their current Covered California plan next year. “That’s why we’re telling people to shop around,” said Kennedy, noting that by changing coverage levels or providers, consumers can lower their premiums.
Northern California consumers could potentially limit their rate increase to an average of 1 percent – instead of the projected average of 7 percent – by switching to a lower-cost provider in the same metal tier, Covered California officials said Monday. That means individuals might find better pricing from a competitor in their same coverage level, say Bronze or Silver, but it could require having to switch doctors.
The new sign-up season for Covered California 2016 coverage starts Nov. 1 and runs through Jan. 31. But starting Monday, consumers can go online to www.coveredca.com to compare plans.
“We urge them to go online, do their due diligence and shop around,” said Kennedy, “to see what’s best for them and their family.”