News Release

Date Posted

Covered California Keeps Premiums Stable by Adding Cost-Sharing Reduction Surcharge Only to Silver Plans to Limit Consumer Impact

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  • In the absence of a federal commitment to continue funding cost-sharing reduction (CSR) reimbursements through the upcoming year, Covered California health insurance companies will add a surcharge to Silver-tier products in 2018.
  • However, because the surcharge will only be applied to Silver-tier plans, nearly four out of five consumers will see their premiums stay the same or decrease, since the amount of financial help they receive will also rise. Those who do not get financial help will not have to pay a surcharge.
  • Financial help means that in 2018, nearly 60 percent of subsidy-eligible enrollees will have access to Silver coverage for less than $100 per month — the same as it was in 2017 — and 74 percent can purchase Bronze coverage for less than $10 per month.
  • California and individual markets across the nation still need a clear commitment that the federal government will continue to make CSR payments to promote lower premiums, save taxpayer money and ensure health insurance companies participate.

SACRAMENTO, Calif. — Covered California announced Wednesday the final rates for its health plans in 2018, giving existing consumers and new shoppers an opportunity to see their expected rates and the financial help available to help them purchase health coverage for next year given their income and particular circumstances.

With this announcement, Covered California noted that health plans will have to include a surcharge on Silver-tier plans for the 2018 coverage year due to the ongoing uncertainty at the federal level. The surcharge is necessary because of a lack of commitment from the federal government to fund a critical piece of financial help known as cost-sharing reductions (CSRs). The average CSR surcharge increase on rates is 12.4 percent, although the surcharge will vary for each health insurance company and will range from 8 percent to 27 percent.

However, because the surcharge is only being loaded onto Silver-tier plans, those who purchase coverage without getting federal help — whether through Covered California or by buying directly from health insurance companies — can be protected from paying any surcharge. Most Covered California consumers who receive financial help in the form of an Advanced Premium Tax Credit, or subsidy, will not see a change in what they pay for their insurance in 2018 because of the surcharge, and many will actually end up paying less because their subsidy amount will increase more than the surcharge.

“Covered California worked hard to come up with a plan that ensures a stable market and protects as many consumers as possible from an unnecessary price hike,” said Peter V. Lee, executive director of Covered California. “While some consumers will face higher costs than expected this year unrelated to the CSR surcharge, they can still shop for a better deal to reduce the impact of the surcharge.”

A Covered California analysis on the impact of the CSR surcharge found that 78 percent of subsidized consumers would either see no change in what they would pay for insurance in 2018, or would pay less than what they would have paid if there had been no CSR surcharge. The remaining 22 percent will see some form of higher net premium because of the CSR surcharge, and about half of them will see increases of less than $25 per month. There were more than 1.2 million subsidized Covered California members among the nearly 1.4 million people enrolled as of March 2017.

Californians who do not get financial help and buy individual coverage directly from their health insurance company will not be charged the CSR surcharge. In addition, Covered California consumers with Silver plans who do not receive financial help to pay their premium can also avoid paying the surcharge by switching to a different metal tier or buying near-identical Silver coverage directly from a health insurance company. Covered California has approximately 65,000 unsubsidized consumers enrolled in Silver plans.

“Covered California is committed to keeping care as affordable as possible and giving all consumers the tools they need to shop for the best deal,” Lee said. The rates announced Wednesday by Covered California for 2018 reflect regulatory review by the California Department of Managed Health Care and the California Department of Insurance.

Under the current law, health plans must offer the cost-sharing reduction subsidies to low-income consumers in the form of lower copays and deductibles, with the federal government reimbursing carriers for the difference in costs. This program will continue to provide lower-cost care to these Californians. Because the administration has made several public statements indicating it may end those payments, Covered California worked to ensure health plans could participate in 2018 by adding the surcharge to make up for the potential loss of those reimbursement payments, which are roughly estimated to be worth $800 million or more to California consumers in 2017.

“Cost-sharing reductions help Californians of limited means access the care they need,” Lee said. “This enables Covered California and other marketplaces to provide coverage that truly matters and makes it more affordable for these consumers to see a doctor when they get sick or injured. They also help lower premiums for those who do not receive subsidies by encouraging enrollment of a larger pool of healthy individuals.”

Affordable Options

Covered California updated its Shop and Compare Tool on www.CoveredCA.com so consumers, insurance agents and others can now begin comparing their coverage options and renewing for 2018. Those who do not have coverage and do not meet special-enrollment conditions can begin shopping and comparing their options and enroll starting Nov. 1, when open enrollment begins.

Financial assistance means that in 2018, nearly 60 percent of subsidy-eligible enrollees will have access to Silver coverage for less than $100 per month — the same as it was in 2017 — and 74 percent can purchase Bronze coverage for less than $10 per month.

“The big story is not the fact that we need to have plans apply a CSR surcharge, but rather the fact that with the financial help consumers can get at Covered California, we continue to bring health care within reach for so many Californians,” Lee said.

Stability of the Individual Market Still Depends on Federal Action on Cost-Sharing Reductions

Lee also stressed that California and individual markets across the nation still need cost-sharing reduction reimbursements for the following reasons:
  • Stable Markets: Covered California and its carriers will begin developing rates for the 2019 coverage year in the spring of 2018. Providing certainty to the market will help keep rates as low as possible and ensure continued carrier participation. Absent clear federal funding of the CSR payments, it is likely that in many parts of the country, including possibly California, health plans will stop participating.
  • Lower Premiums: In August, the Congressional Budget Office (CBO) issued a report that found that ending the CSR reimbursements would raise premiums by about 20 percent in 2018 and 25 percent in 2020 and subsequent years. While Covered California has developed a plan to protect consumers from these hikes, consumers in other states could feel the impact of these increased costs.
  • Save Taxpayer Money: The CBO also found that ending the CSR reimbursements would increase the federal deficit by $194 billion over the next 10 years, since the premium tax credit would rise along with the premiums.
“As things change federally, we will continue to be responsive to real consumers’ needs in California, even for 2018,” Lee said. “But carriers across the country need certainty, and a federal commitment to funding CSR payments would lower rates in many states and ensure that markets are stable and consumers have choice,” Lee said. “In addition, making the CSR payments actually saves taxpayer money because it keeps premiums low and reduces the amount of federal financial help needed to help consumers pay for their coverage.”

Covered California’s open-enrollment period begins Nov. 1 and runs through Jan. 31. Consumers will be able to explore their options and find out if they qualify for financial help by visiting www.CoveredCA.com and using the Shop and Compare Tool. They can also get free and confidential enrollment assistance by visiting www.coveredca.com/find-help/.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

New Survey Highlights Continued Need for Marketing of Health Insurance


  • Overwhelming majorities of consumers are aware of Covered California, and enrollment and renewal intent remain very strong.
  • However, even with very high recognition of Covered California, nearly 75 percent of subsidy-eligible uninsured Californians either wrongly assume they do not qualify for financial help or are unsure whether they do.
  • Affordability remains key: Uninsured consumers who expect to be eligible for financial help are more than twice as likely to enroll in coverage as those who expect to be ineligible for assistance.
  • While many are uncertain about the long-term future of the Patient Protection and Affordable Care Act and Covered California, in the near term they overwhelming plan to renew or newly sign up for coverage.

SACRAMENTO, Calif. — Covered California released a study on Thursday that shows the strength of the exchange’s brand as well as the continued importance of making sure consumers are aware of the financial help that is available to make health insurance more affordable.

“This study affirms what Covered California has long known: Ongoing marketing is a critical element to building a stable and successful individual insurance market that works for consumers,” said Peter V. Lee, executive director of Covered California. “It is great news that after five years Covered California has name recognition on par with Nike and Coca-Cola, but that doesn’t mean consumers know they are eligible for financial help, which is what is needed to promote enrollment.”

The study, “A Quantitative Study on Current Attitudes of Uninsured and Select Insured Californians Toward Health Insurance Coverage,” was conducted to assess and track consumer perceptions of health insurance in the changing political environment and help Covered California prepare its marketing messages for the upcoming open-enrollment period, which begins Nov. 1 and will go through Jan. 31 in California.

Among the survey’s key findings (which are available in graphic display
http://www.coveredca.com/news/pdfs/OE5-Research-&-Creative-Board-Meeting-10.5.17.pdf):

  • An overwhelming majority of consumers, 96 percent, has heard of both Covered California and the Affordable Care Act (ACA).
  • The vast majority of those currently insured through Covered California plan to renew their coverage: 88 percent of current enrollees say they intend to renew their coverage, including 94 percent of those who receive financial help and 70 percent of those who do not receive any financial help.
  • While the exchange is well-known, 73 percent of the uninsured — who would be eligible for financial help — either do not know they qualify for assistance, or wrongly believe they are not eligible for assistance.
  • Knowledge of being eligible for financial help is vital because uninsured consumers are twice as likely (71 percent) to plan to enroll in Covered California as those who expect not be eligible for financial help or are unsure (34 percent).

“Health insurance is important because we all know that life can change in an instant,” Lee said. “When people know they can get financial help to bring that health care within reach, they sign up for coverage and protection.”

As of June 2016, the average subsidy-eligible enrollee received a subsidy of $300 per month to go toward their policy. Nearly nine out of every 10 Covered California members — more than 1.2 million Californians — receive some level of financial help.

In addition, the study found that the political debates in Washington had spurred uncertainty among the uninsured and those who have a health plan through Covered California. However, while nearly two-thirds of those surveyed reported they were concerned about the future of Covered California and the Affordable Care Act, four out of five still plan to renew their coverage.

“Covered California is here for the long haul, and as we once again prepare to launch an extensive statewide marketing and promotional campaign, we recognize that consumers are looking for the certainty that we are providing today,” Lee said. “While there may be uncertainty in the long term, in the near term Californians want health insurance if they can afford it. Our job is to get them the information they need to get and stay covered.”

The study, which was conducted between June 9, 2017, and June 30, 2017, included focus-group testing and an online survey of 500 respondents. It is the second in a series of surveys conducted by Greenberg Strategy, an Emeryville-based research and strategy consultancy with clients around the world.

The complete study can be found here: http://www.coveredca.com/PDFs/October_2017_Covered_California_Sentiment_Survey_FINAL.pdf.

Once open enrollment begins, consumers interested in enrolling online can do so on CoveredCA.com. They can also get free and confidential in-person assistance, in a variety of languages, by clicking on “Free Local Help to Enroll.” They can find a nearby enroller or have a certified enroller contact them through the “Help on Demand” feature. Consumers can also enroll over the phone by calling Covered California at (800) 300-1506.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

New Analysis Shows the Graham-Cassidy Plan Would Force Millions to Lose Coverage and Threaten to Collapse California’s Individual Market


  • New analysis shows that the Graham-Cassidy plan could trigger the collapse of California’s individual market as soon as 2021, meaning that both those with and without pre-existing conditions would face having no health insurance options.
  • California and most states would be forced to choose between protecting low-income people or the individual market. By 2027 Graham-Cassidy could lead to 7.5 million more uninsured Californians — a higher number than before the implementation of the Affordable Care Act.
  • The impact on Californians would be immediate: Under most scenarios, there would be between 1.5 and 2 million fewer Californians with health coverage as soon as 2021.

SACRAMENTO, Calif. — Covered California released an analysis on Monday that details the potential impact of the proposed amendment to the American Health Care Act of 2017, known as the Graham-Cassidy plan. The analysis finds the proposal could trigger the near-term collapse of California’s individual health insurance market and under any likely scenario would lead to 7.5 million Californians losing their health insurance by 2027 — which would be more than the state saw prior to the implementation of the Affordable Care Act.

“The Graham-Cassidy plan takes resources away from California and from the majority of states, which means that far fewer Americans would have insurance or the existing protections from insurers,” said Peter V. Lee, executive director of Covered California. “The effect on California would be devastating, and lead not only to there being more uninsured people than there were before the Affordable Care Act, but would also cause huge negative impacts on the health care delivery system, the economy and on those with employer-based coverage.”

The analysis, developed by John Bertko, chief actuary for Covered California, and Wes Yin, an economist at the University of California, Los Angeles, modeled two scenarios that examined how California leaders might respond to a federal funding cut of nearly $139 billion between 2020 and 2027. In both cases, the consequences of the cuts would start taking effect in 2020 and quickly lead to millions losing their coverage.

The first scenario assessed what would happen if California used its greatly reduced funding to protect low-income Californians who have benefited from the expansion of Medi-Cal, California’s Medicaid program. The second scenario examined what would happen if California chose to protect the individual market at the expense of lower-income Californians.

“Proponents claim Graham-Cassidy gives states flexibility and choice, but in reality it puts states into a lose-lose situation,” Lee said. “Under this plan, California and states across the nation would be forced to either turn their backs on their most needy residents, or let the individual market be destroyed. Either way, millions lose coverage.”

Under any scenario, California would receive far less federal funding than it does today. In addition, the report highlights the fact that many states that are described as “winners” would actually get less funding over the long term. The report found that these states, which would gain new federal funding at the expense of dozens of other states that have effectively implemented the Affordable Care Act, could do more for their residents if they were to also expand their Medicaid program, as California and 31 other states, including the District of Columbia, have done. These states include Alaska, Arizona, Indiana, Nevada, Ohio, Pennsylvania and West Virginia.

“Graham-Cassidy would be devastating for California and roll back historic gains in expanding health care in our state,” said Diana Dooley, Secretary of the California Health and Human Services Agency and Chair of the Board of Covered California. “No amount of state ‘flexibility’ can make up for the havoc this bill would wreak on California’s health care system.”

The analysis sought to model the potential impact on coverage, whereas most of the projections nationally have focused solely on the changes in federal funding. “We wanted to project the potential impact on Californians rather than allow the abstract issues of ‘changes in billions of dollars in funding’ to cloud the reality that millions would likely lose coverage,” said John Bertko.

In the first scenario, in which resources are used to first protect lower-income Californians who have benefited from the expanded Medi-Cal program, the result would be that nearly 800,000 Californians who get help purchasing private coverage through Covered California would lose their coverage in 2020, and more than a million would lose their financial assistance in 2021.

The dramatic decrease in the number of people covered in the individual market would have the effect of increasing premiums by more than 70 percent in 2020. There would also be catastrophic effects on the risk pool, as healthier consumers are priced out of coverage both in Covered California and in the off-exchange individual market.

In this scenario, California’s individual market could experience what is commonly referred to as a “death spiral” and collapse as soon as the year 2021. “The decline in the number of those receiving financial help to buy individual market coverage, while requiring health plans to provide coverage to those with pre-existing conditions, would very likely lead to the collapse of the individual market by 2021 if not before,” said economist Wes Yin, coauthor of the analysis.

Along with Medi-Cal funding cuts, this scenario could lead to 7.5 million more uninsured Californians by 2027 — far more than there were prior to the implementation of the Affordable Care Act.

In the second scenario, the analysis models the impact of Medi-Cal beneficiaries’ bearing the brunt of the reduced funding, while the individual market is provided protection by maintaining the financial support to 1.2 million Californians. Under this scenario, 2.9 million Californians would lose coverage by 2026. In 2027, when additional portions of federal funding disappear, the individual market would likely collapse and even more Medi-Cal beneficiaries would lose coverage — like the first scenario — leading to an increase in the state’s uninsured by 7.5 million.

“Under both scenarios, there aren’t enough of the resources required to sustain a viable individual market and protect low-income Californians,” Lee said. “California and the nation can do better. As we get ready to launch our fifth year of open enrollment, we hope that the Senate will resume bipartisan discussions on the steps needed to stabilize the individual market to protect millions of Americans.”

Click here to see the full analysis, “Potential Impacts of Graham-Cassidy-Heller-Johnson on Californians and the Individual Health Insurance Market,” – http://www.coveredca.com/news/pdfs/CoveredCA_Potential_Impacts_Graham-Cassidy-9-25-17.pdf.

Covered California also joined with other state-based marketplaces on Monday in sending a letter to Congressional leaders calling out both the challenges the markets face and the virtual impossibility most states would face in trying to establish to establish a new health care system by 2020. Read today’s letter here – http://www.coveredca.com/news/PDFs/GCHJ_SBM_ResponseLetter_9.25.17_FINAL.pdf.

Today’s letter follows one sent last month where Covered California and other state-based marketplaces urged Senators to take immediate steps toward stabilizing markets through greater flexibility and continued investments in marketing and outreach. Read the Aug. 29 letter here - http://www.nashp.org/wp-content/uploads/2017/01/HELP-Letter_SBMsandSBMFPs_Aug2017.pdf.

Since the implementation of the Affordable Care Act, California has reduced its uninsured rate from 17 percent in 2013 to a historic low of 7.1 percent by the end of 2016.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

Covered California Earns Best of California Awards for "Most Innovative Use of Social Media" and "Best Application Service the Public"



  • Both honors, part of the 15th annual Best of California Awards, highlight the digital works of all state agencies.
  • Real Stories of Covered California garners "Most Innovative" honor with enrollees sharing their experiences of having coverage when they needed it most.
  • The Enrollment Partner Portal serving thousands of insurance agents and community groups statewide earns "Best Application Serving the Public."

SACRAMENTO, Calif. — Covered California was recognized by the Center for Digital Government for two of its Best of California Awards for 2017.

Real Stories of Covered California, which features enrollees sharing their experiences of obtaining health insurance through the agency, was awarded the “Most Innovative Use of Social Media/Citizen Engagement” for helping the exchange engage a social media audience with stories to which they may relate. Covered California’s Real Stories can be viewed here: http://www.coveredca.com/real-stories/.


“We are very proud of the work done by the team at Covered California and glad to see these projects, that give voice to the real experience of Californians getting coverage, recognized as best-in-class,” said Peter V. Lee, executive director of Covered California. “These awards are testaments to Covered California keeping focused on serving Californians and helping them get the coverage and care they need.”

Covered California also was honored for the “Best Application Serving the Public” for its Enrollment Partner Portal.

The portal helps more than 5,000 insurance agents and Certified Enrollment Counselors on the front lines of helping consumers get coverage. The portal has also automated previously manual processes for applying, certifying and training enrollers and also integrated e-signing into workflow processes to allow enrollment partners to complete their applications and certifications online — something that was previously done via manual scan and email. This much faster new system helps many Californians who would not otherwise understand or access health care without enrollment partners.

A full list of winners for the Best of California Awards can be found here: http://www.govtech.com/cdg/best-of-california/Best-of-California-Awards-2017-Winners-Announced.html.

Covered California currently is working with more than 15,000 insurance agents, community groups and county eligibility workers to prepare for the upcoming open-enrollment period, which begins Nov. 1 and runs through Jan. 31, 2018.


“We are working hard on plans for this upcoming open-enrollment period to have everything in place to make sure consumers know they can renew their coverage, and if they are uninsured, many will qualify for financial assistance to help buy health insurance,” Lee said. “Life can change in an instant and it’s important all Californians who are eligible have health care coverage.”

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.
Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the legislature. For more information about Covered California, please visit www.CoveredCA.com.

Covered California Releases Comprehensive Report on the Importance of Marketing and Outreach to Stabilize the Individual Market

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  • Report unveiled in Washington D.C. details how significant investments in marketing and outreach are key elements to stabilize individual insurance markets.
  • Covered California’s extensive marketing has resulted in one of the best take-up rates and lowest risk scores in the nation, having saved consumers up to $1.3 billion in premiums in 2015 and 2016.
  • Report indicates that if the federal government conducted marketing and outreach at a level similar to California, it would invest 10 times more than currently budgeted and could result in lower premiums and 2.1 million more enrollees.
  • Report also indicates that the Federally-facilitated Marketplace’s planned reduction in marketing and outreach investments may likely lead to 1 million fewer Americans with insurance and premiums increasing for those who remain insured.

WASHINGTON, D.C. — Covered California Executive Director Peter V. Lee released an in-depth report on Wednesday regarding the critical role that marketing and outreach play in promoting a stable individual health insurance market and making coverage more affordable.

“A comprehensive marketing and outreach campaign has been a critical ingredient of Covered California’s success, and more importantly is a vital component of any effort to promote stability in individual markets across the nation,” said Lee. “Getting the word out is a proven way to promote enrollment and bring more healthy people into the risk pool, which lowers premiums and saves money for everyone.”

The report, “Marketing Matters: Lessons From California to Promote Stability and Lower Costs in the National and State Individual Insurance Markets,” was presented at a forum in Washington D.C. It provides an in-depth summary of research on the role of marketing health insurance, and analysis of the lessons Covered California has learned since first opening its doors.

The report highlights the following facts:
  • Covered California’s extensive marketing and outreach helped the state’s individual market have one of the best take-up rates and lowest risk scores in the nation [1]. As a result, premiums were between $850 million and $1.3 billion lower than they would have been if the state had the national average risk mix in 2015 and 2016.
  • Covered California estimates that every marketing dollar it has spent has yielded more than a three-to-one return on investment (ROI). Efforts to promote the value of coverage and the options available to consumers boosted the enrollment of healthy consumers and likely lowered premiums by 5 to 8 percent in 2015 and 2016.
“The evidence is clear: While multiple elements are needed for stability in the individual markets, making robust investments in comprehensive outreach and marketing pays off by helping enroll a broad mix of consumers,” Lee said. “The data underscore the benefits of supporting marketing as a central element to stabilizing insurance markets.”

The report found that if the Federally-facilitated Marketplace (FFM) invested at a comparable rate to Covered California — which devotes 1.4 percent of the marketplace’s total premiums to marketing and outreach — it would invest $480 million, which is more than 10 times what the federal government recently announced it would spend to promote enrollment for 2018. The analysis finds that if the FFM invested at this level over three years, it would likely result in 2.1 million more Americans enrolling or keeping their coverage during this time, while decreasing premiums by an average of 3.2 percent, and generate a return on investment for the spending of about five to one.

By contrast, the report details modeling of the potential impact of the announced 72 percent reduction in federal marketing and outreach funding. This lower level of marketing will likely result in 1 million fewer Americans getting insurance, and premiums that will be more than 2.5 percent higher.

Lee noted that the money to support marketing and outreach for the 39 states in the Federally-facilitated Marketplace is available through the federal plan assessments that are collected for this purpose. They are projected to amount to $1.2 billion in 2018.

“We believe that facts and evidence should drive policy, and have shared our findings with the Trump Administration,” Lee said, noting that Covered California has provided this report to Health and Human Services Secretary Tom Price and Centers for Medicare and Medicaid Services Administrator Seema Verma (http://www.coveredca.com/news/pdfs/CoverdCA_Ltr_to_Admin_Verma-9-12-17.pdf.)

In addition, Covered California joined with the 11 other state-based marketplaces to suggest several strategies to immediately help strengthen and stabilize the individual market. “Health plans and local markets need definitive clarity that the cost-sharing reduction subsidies will be funded for the coming years, and there should be strong consideration to putting in place a national reinsurance program,” said Lee. (The Aug. 29 letter can be viewed here: http://www.nashp.org/wp-content/uploads/2017/01/HELP-Letter_SBMsandSBMFPs_Aug2017.pdf.)

Panelists at the forum included Kevin Patterson, CEO of Connect for Health Colorado; Christopher Graves, president and founder of the Ogilvy Center for Behavioral Science; and Janet Trautwein, executive vice president and CEO of the National Association of Health Underwriters (NAHU).

“We have seen the power of targeted marketing in Colorado, where we have a stable market thanks to enrolling the healthiest consumer pool in the nation,” Patterson said. “The research shows we still have work to do on making sure consumers know about the financial help that helps bring health care coverage within reach.”

Lee detailed the findings in the report with Christopher Graves, an expert on the behavioral science behind marketing and the challenges of convincing consumers to buy health insurance.

“We just witnessed two huge disasters — hurricanes Harvey and Irma — and yet fewer than half the homeowners in high-risk flood zones had flood insurance. Getting young and healthy people to understand the invisible health care threats they face is even harder. Unfortunately, behavioral science reveals people are not rational when it comes to insurance. So we have to overcome these human biases with smart outreach,” said Graves.

Janet Trautwein, whose organization represents more than 100,000 employee benefits professionals across the country, echoed the importance of marketing to sell health insurance.

“When health insurance exchanges support the people on the ground who sell policies, they can be vital partners in attracting more consumers to exchanges and ensuring that the risk mix is strong,” she said.

A high-level overview of the report and modeling can be found here: http://hbex.coveredca.com/data-research/library/CoveredCA_Marketing_Matters_Issue_Brief.pdf.

Covered California recently moved to increase its marketing and outreach budget by $5.3 million, to a total of $111 million for the upcoming 2018 coverage year. In addition, last week Covered California announced its 2018 plans and rates for Covered California for Small Business (http://news.coveredca.com/2017/09/covered-california-for-small-business.html).

“The fact that Covered California for Small Business announced rate increases of less than 6 percent for 2018 is further evidence that the challenges facing the individual markets are solvable and are being fostered by the uncertainty nationally,” Lee said.

Covered California has already taken several steps to maintain market stability and protect consumers. In August, the exchange announced the following moves:
  • Covered California will wait until Sept. 30 to decide whether its health plans must add a cost-sharing reduction surcharge to Silver-tier plans.
  • The board adopted new contract language to provide carriers with guidance on how to address unanticipated losses or gains due to changes in existing federal policies or other uncertainties.
  • The board approved a $5.3 million increase to Covered California’s marketing and outreach budget for 2018, for a total of $111 million.
(See the full press release: http://news.coveredca.com/2017/08/covered-californias-board-takes-action.html.)

Covered California plans to use the extra marketing funding to increase the number of television and radio ads around key dates throughout the upcoming open-enrollment period, which in California will not be the shortened period of the Federally-facilitated marketplace (Nov. 1 through Dec. 15). Instead, we will continue with the three month open enrollment period, from Nov. 1 through Jan. 31.

“Open enrollment is the time to change lives, and we stand ready with our partners across the state, including 14,000 Certified Insurance Agents, to spread the word about the coverage that is available and the financial help that can bring that care within reach,” Lee said.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

Covered California for Small Business Announces Rates and Plans for 2018


  • The weighted average rate change of 5.6 percent is less than last year and is slightly lower than the overall medical trend for small- and large-group business lines in California.
  • Covered California for Small Business (CCSB) has more than 35,500 members to date, a more than 25 percent increase over last year.
  • CCSB is launching enhanced web-based enrollment and renewal capabilities that will be available to customers, Certified Insurance Agents and general agents in October.

SACRAMENTO, Calif. — Covered California for Small Business (CCSB) unveiled the health plan choices and rates for small-business employers and their employees for the upcoming 2018 plan year. The statewide weighted average rate change will be 5.6 percent for employers and their employees, which is down from the 5.9 percent change in 2017.

“Our small-business exchange is strong, and we are pleased to welcome back five health insurance companies to compete in regions across the state,” said Peter V. Lee, executive director of Covered California. “The rates announced today show how marketplaces can work to provide consumers with value and choice.”

CCSB will be offering five plans in 2018, including two preferred provider organization (PPO) plans with full provider networks, from Blue Shield of California and Health Net, and two health maintenance organization (HMO) plans that are provider- and hospital-based, from Kaiser Permanente and Sharp Health Plan. Rounding out the 2018 portfolio of health plans is Chinese Community Health Plan in San Francisco. CCSB will not be offering Western Health Advantage in 2018, a move that will affect approximately 350 consumers.

“We are confident that small-business employers and their employees who need affordable health insurance will have excellent choices in Covered California for Small Business,” said Robert Manzer, deputy director of Small Business Exchange and Agent Program Management. “This is a market that works for consumers, bringing choice and stability to California businesses.”

CCSB has experienced double-digit membership growth for the third consecutive year. Currently, more than 35,000 individuals have insurance through CCSB, representing a growth of approximately 7,600 individuals for a 27 percent gain in membership over this time last year. This makes CCSB one of the largest small-business health options programs in the nation.

Similar to the individual market, consumers may be able to limit increases in their rates or perhaps even save money on their premiums by shopping and switching to the lowest-cost plan in the same metal tier.

However, unlike the individual market, CCSB is not affected by the current uncertainty at the federal level because it does not rely on federal funding. CCSB is self-sufficient and must compete for membership in the commercial small-business insurance marketplace in order to grow its business, just like any other commercial enterprise.

Lee said today’s moderate rate change shows how the market can work when it is stable and supported. “This is what stability can look like,” he said.
CCSB is also pleased to announce its web-based enrollment and renewal portals for employers, agents and general agents. The enhancements will allow CCSB to be a leader in moving the small-group insurance market to an e-commerce industry.

“Reducing the administrative burden and inefficiencies that come with enrollment and the ongoing maintenance of small-business insurance is a business imperative,” Manzer said. “We are pleased to be able to play an important role in achieving that goal.”

Businesses with up to 100 employees can apply for health insurance coverage for their workers through Covered California for Small Business. Federal tax credits may be available to employers with 25 or fewer employees.

Visit www.CoveredCA.com/forsmallbusiness/ for information on how to apply.

Family dental plans are optional and will be provided by Delta Dental of California, Liberty Dental Plan of California, Dental Health Services, Premier Access and California Dental Network.

Covered California’s Board Takes Action to Protect Consumers and Maintain Market Stability


  • Given the ongoing uncertainty at the federal level, and the potential for Congress and the administration to enact policy changes next month, the exchange will delay until Sept. 30 a decision on whether it must add a cost-sharing reduction surcharge to Silver plans.
  • Covered California will amend its contracts with carriers to promote participation and lower prices in 2018 by allowing for multi-year adjustments to their margins.
  • Covered California will increase its marketing budget by $5 million, for a total of $111 million, to provide additional outreach and help to consumers.


SACRAMENTO, Calif. — Covered California’s Board of Directors took action Thursday to promote stability of the individual health insurance market and to continue to provide consumers with choice and the lowest rates possible in the face of persistent national uncertainty.

“The lack of clarity and direction at the federal level continues to be a challenge, and Covered California is doing everything it can to stabilize the market and protect consumers,” said Peter V. Lee, executive director of Covered California. “A stable market is critical for millions of consumers, and Covered California is showing how it can be done.”

“We have a way to protect consumers, but it is complicated and will cause unnecessary confusion and anxiety. Therefore, we are extending our deadline to give Congress time to act when they return in September,” said California Health and Human Services Secretary and Covered California Board Chair Diana Dooley. “We are heartened by the bipartisan discussions that put consumers first, but we can’t wait past Sept. 30.”

Covered California announced three items that are all geared toward providing certainty and stability to consumers:

  • Covered California will wait until Sept. 30 to decide whether its health plans must add a cost-sharing reduction (CSR) surcharge to Silver-tier plans. Health plans are required to offer cost-sharing reductions to lower-income consumers, in the form of lower copays and deductibles, which help reduce out-of-pocket costs when consumers access care. For the past four years, the federal government has directly reimbursed the health insurance companies for those costs, but that continued funding remains in question. Without any firm commitment to continue those reimbursements through 2018, Silver-tier consumers will see an additional CSR surcharge — averaging 12.4 percent — on the gross price of their premiums. If Congress and the president decide to fund CSRs by Sept. 30, rates for Silver-tier plans could move forward without the added CSR surcharge.
    • If no decisions on CSR funding are made by Sept. 30, the gross or total premium would reflect this CSR surcharge for consumers with Silver-tier plans who receive subsidies. However, in most cases, consumers would not see a “net” change in what they would pay since their premium tax credit would also increase.
  • The board adopted new contract language to provide carriers with more assurances during this time of unprecedented uncertainty in order to maximize consumer choice and participation in 2018 with the lowest rates possible. If a carrier incurs unanticipated losses in 2018 due to changes in existing federal policies or other uncertainties, such as the lack of enforcing the individual mandate, the carrier will be able to request a recoupment of those losses over a three-year period (plan years 2019 to 2021). Also, if a carrier experiences unanticipated profits due to changes in existing federal policies, such as the resumption of a reinsurance fund, they will factor those profits into their rates over the next one to three plan years.
  • The board approved an increase to Covered California’s marketing and outreach budget for 2018 of approximately $5 million, for a total of $111 million. The additional funding will be used to increase the number of television and radio ads around key dates throughout the upcoming open-enrollment period, which will run from Nov. 1 through Jan. 31. Covered California will also engage in a more robust regional marketing direct-mail campaign for consumers affected by the CSR surcharge.

“These actions will protect our consumers and give our carriers the certainty they need to continue providing choice at a good price,” Lee said.

“While we are doing our best to manage a difficult situation, we hope Congress and the administration will provide clear guidance on how it intends to stabilize the individual insurance market.”

This week the Congressional Budget Office issued a report that found that ending the CSR reimbursements would raise premiums by about 20 percent in 2018 and 25 percent in 2020 and subsequent years. In addition, since the premium tax credit would rise along with the premiums, ending the CSR reimbursements would increase the federal deficit by $194 billion over the next 10 years.


Covered California Releases 2018 Rates: Continued Stability and Competition in the Face of National Uncertainty


  • Covered California remains stable, with an average weighted rate change of 12.5 percent. The change is lower than last year and includes a one-time increase of 2.8 percent due to the end of the health insurance tax “holiday.”
  • The competitive market allows consumers to limit the rate change to 3.3 percent if they switch to the lowest-cost plan in the same metal tier.
  • Health plans also submitted rates for a potential “cost-sharing reduction surcharge” that would be added only to the premium for Silver-tier consumers. The increase averages 12.4 percent, which is what is required to address continued uncertainty over the federal funding that lowers out-of-pocket costs for more than 650,000 enrollees in California.
  • All 11 health insurance companies will return to the market in 2018, and 82 percent of consumers will be able to choose from three companies or more. However, Anthem will be leaving some markets that comprise about half of its enrollment.
  • Downloadable comments from Executive Director Peter V. Lee: (Video).

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SACRAMENTO, Calif. — Covered California unveiled proposed rates for the 2018 individual market, announcing that all 11 of its participating health insurance companies will be returning for the upcoming year. Covered California continues to be a stable marketplace where consumers can find affordable coverage.

“Covered California remains robust and strong, and we are pleased to welcome back all 11 plans to compete in regions across the state,” said Covered California Executive Director Peter V. Lee. “While there is ongoing uncertainty and a lack of clarity at the federal level, consumers who need affordable health insurance will continue to have good choices in Covered California next year.”

Covered California Rate Change for 2018

Lee said the average statewide rate change for 2018 will be a 12.5 percent increase and noted that consumers can reduce that amount to less than a 3.3 percent increase if they shop for the best value and switch to the lowest-priced plan in the same metal tier.

“Covered California’s competitive market means consumers have the power to shop and find the best value,” Lee said. “We know our consumers look for the best deal and often end up paying less than the initial rates suggest.”

In addition to shopping, most consumers enrolled through Covered California will not pay the entire rate change because the amount of financial help they receive from the federal government will also increase. The federal subsidy is tied to the price of the second-lowest-cost Silver plan and as rates rise or fall, so does the subsidy, which will help offset a significant portion of the rate changes for consumers.

The rate change varies by health plan and region, with some plans having decreases in their premiums and others having increases, which means shopping is more important than ever. Across all plans, one factor that is built into these rates is a one-time adjustment because of the end of the “holiday” on health plans’ having to pay the Patient Protection and Affordable Care Act’s health insurance tax (HIT). This factor alone was worth an average of 2.8 percent. Without the one-time increase for the HIT, the average increase for the health plans Covered California contracts with would have been less than 10 percent.

Both the proposed rate change and the CSR surcharge are currently under review by state regulators, the Department of Managed Health Care and the California Department of Insurance.

Federal Uncertainty Continues to Challenge Health Insurance Companies and Consumers Across the Country

The announcement of 2018 rates and plans comes in the midst of ongoing uncertainty at the federal level surrounding key elements of the Affordable Care Act, particularly in regard to cost-sharing reduction (CSR) payments.

The law requires health insurance companies to offer cost-sharing reductions to lower-income consumers, in the form of lower copays and deductibles, which help reduce out-of-pocket costs when consumers access the care they need. For the past four years, the federal government has directly reimbursed the health insurance companies for those costs. While health plans are required to help these consumers lower their out-of-pocket costs, those payments are in jeopardy because the administration has stated it will only commit to making these payments on a month-to-month basis.

Covered California instructed health insurance companies to submit their rates assuming direct payment to fund the CSR subsidies would be continued, but to also submit a separate CSR surcharge to “load” any costs to fund this program onto Silver-tier plans for those who receive subsidies. As a result, Silver-tier consumers may see an additional “CSR surcharge” that averages 12.4 percent — ranging from 8 percent to 27 percent on the gross price of their premiums — if there is no commitment from the administration to fund these payments through 2018. However, while the gross or total premium for consumers receiving subsidies would reflect this CSR surcharge, in most cases, consumers would not see a “net” change in what they would pay since the premium tax credit would also increase.

“This action allows Covered California to keep the market stable and protect consumers from this uncertainty,” Lee said. “While most Silver-tier consumers will not see the full impact of the ‘CSR surcharge,’ and every consumer could avoid paying any additional premium by shopping, we hope that we do not need to implement this work-around that would cause unnecessary confusion and ultimately cost the federal government more than it would to continue to make the payments directly.

“A decision by the federal government is needed in the next few weeks,” Lee continued.
“Without clear confirmation from the administration that these payments are secured, we will be forced to have health insurance companies in California add a CSR surcharge to the Silver-tier rates.”

In releasing these rates, Covered California also communicated to Secretary of Health and Human Services Tom Price and the Centers for Medicare and Medicaid Services Administrator Seema Verma the need for clear guidance regarding the ongoing funding of the CSR subsidy program. (The letter is available at: http://www.coveredca.com/news/pdfs/CoveredCA_CL_2018_Rates-HHSLetter.pdf)

Silver-tier consumers who receive no subsidies will be encouraged to explore purchasing a different metal-tier product in Covered California — none of which have prices that include the CSR surcharge — or consider buying a nearly identical Silver plan offered outside Covered California, which would not have the CSR surcharge.

“We’ll be working diligently with health plans, insurance agents, community partners and others as we approach open enrollment to make sure consumers know how to shop smart this fall for 2018 coverage,” said Lee.

Moving forward, Covered California will continue to look for ways to stabilize the market to reassure health insurance companies, provide robust competition and choice and protect consumers.

A Stable Market, Consumer Choice and the Reduction of Anthem’s Coverage Footprint

Covered California has built a competitive market that continues to attract a good risk mix — the second best in the nation — by using robust marketing to attract consumers to the plans and benefits that address their needs. The stability of the individual market was confirmed by recent reports from the Centers for Medicare and Medicaid Services and the Kaiser Family Foundation, which respectively reported that the health status of consumers in the individual market nationally remains steady and health insurance companies are becoming profitable.

For 2018, all of the 11 health insurance companies offering plans in 2017 are returning to the market for a second straight year. The uncertainty at the federal level, however, is affecting some companies. In particular, Anthem Blue Cross of California is withdrawing from 16 of California’s 19 pricing regions where it serves approximately 153,000 consumers, while remaining in three regions (regions 1, 7 and 10) where it covers more than 108,000 consumers (41 percent of its current enrollment).

While this change will mean about 10 percent of those enrolled in Covered California will need to pick a new plan, the individual market in California remains very competitive, with more than 82 percent of consumers being able to choose from three or more health insurance companies. There will be no “bare” counties or areas where consumers have no plan options. In addition, 88 percent of hospitals in California will be available through at least one Covered California health insurance company in 2018. The fact sheet “Covered California’s Individual Market in 2018: Competition and Choice” can be found here: http://www.coveredca.com/news/PDFs/CoveredCA_Consumer_Choice_2018.pdf.

“The enrollees who are affected by Anthem’s decision to pull out of some regions should know that their existing coverage will remain intact throughout the remainder of 2017, and they will have good options when they switch plans for 2018,” Lee said. “We will assist these consumers in shopping around for the right plan, which will be helped by the fact that 84 percent of doctors contracted by Anthem are also available through another health plan.”

During the renewal process, all consumers will have an opportunity to shop for a new plan by working with a Certified Insurance Agent, the Covered California Service Center or another certified enroller. Those Anthem consumers who need to move to a new plan and choose not to actively shop will be renewed automatically into the lowest-cost plan in their same metal tier. They can change that plan during open enrollment if they choose.

Covered California will take robust steps in the months ahead to assist the affected Anthem consumers as they transition to another plan, including: regular communication with agents so they can communicate options to their consumers, a new provider directory that will allow consumers to see which doctors are available in which plans, regular marketing emails explaining to consumers their options, and updates to CoveredCA.com with the latest information.

Providing Consumers With the Right Care at the Right Time

In announcing the new rates, Covered California also reiterated its continued commitment to making sure consumers are getting the care they need and addressing the underlying problem of high health care costs. “We are about more than just getting people an insurance card,” said Lee. “In 2018 we will build on the work of the past four years to make sure people with insurance through Covered California are getting the right care and the right time.”

For example, 2017 marked the first year of a policy requiring all health plans to assign those who sign up with them to a primary care clinician within 60 days of enrolling. This new initiative aims to help consumers get the right care when they need it by connecting them to providers who can serve as the point of entry into an often complex and daunting health care system. The result was that 99 percent of consumers were matched to a primary care physician or clinician.

In addition, Covered California is making additional improvements to its patient-centered benefit design. In 2018, consumers in Silver 94, Gold and Platinum plans will have lower out-of-pocket maximums. Platinum consumers will have a lower copay to see a specialist. Gold consumers will see lower copays for primary care and urgent care visits, and consumers in Silver and Silver 73 plans will see a lower pharmacy deductible.

These improvements build on features already in place that ensure most outpatient services in Silver, Gold and Platinum plans are not subject to a deductible, including primary care visits, specialist visits, lab tests, X-rays and imaging. In addition, some Enhanced Silver plans have little or no deductible and very low copays, such as $5 for an office visit. Even consumers in Covered California’s most affordable Bronze plans are allowed to see their doctor or a specialist three times before the visits are subject to the deductible.

“Covered California is a model that is working,” Lee said. “I applaud the many health insurance companies, doctors, hospitals and other providers who are in it for the long haul of making sure Californians can count on them for affordable, quality health coverage and care.”

Covered California’s 2018 Rate Booklet can be found here: http://www.coveredca.com/news/PDFs/CoveredCA_2018_Plans_and_Rates_8-1-2017.pdf.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.