Covered California Enrollees Are Listed Among the Nation’s
Healthiest
SACRAMENTO, Calif. — In a first-of-its-kind report, the
Centers for Medicare and Medicaid Services (CMS) announced the results of two key
programs of the Patient Protection and Affordable Care Act aimed at stabilizing
health insurance premiums.
Health insurance companies within Covered California
received more than $1.1 billion in reinsurance payments and more than $600
million in risk adjustment transfers. The money for reinsurance comes from a
fee on all private health insurance coverage (in the individual, small-employer,
large-employer insured and large-employer self-insured markets), and the risk adjustment
payments are from the health insurance companies themselves and do not include
taxpayer dollars.
The programs are designed to protect consumers and keep
rates stable by allowing health insurance companies to build their pool of
enrollees without worrying about whether they will incur high medical bills
from their consumers or whether they will enroll a group of consumers that is less
healthy than average.
“Instead of death spirals, the Affordable Care Act is
working exactly as intended,” said Covered California Executive Director Peter
V. Lee, “with year-over-year cycles of lower-than-expected premiums and more
people getting coverage.”
The report showed the amounts each carrier received through
reinsurance and how much they either paid or received through risk adjustment.
In addition, the report also showed that California had one
of the lowest state average risk liability scores in the country, which means the
state’s enrollees are among the nation’s healthiest.
Covered California Chief Actuary John Bertko pointed to two
important factors: “Covered California made a smart decision to require exchange
plans to convert all of their existing products to plans that complied with the
Affordable Care Act. Combined with a successful 2014 open enrollment, younger
and healthier consumers were brought into the exchange early on,” he said.
Lee said the reinsurance and risk adjustment programs are
key protections for consumers and have already been proven to work. He pointed
to Covered California’s competitive rates during its initial launch for
coverage in 2014 and the first renewal year, 2015.
“We enrolled more than 1 million people in our first year,
which led to a rate increase for 2015 that was a fraction of what we saw prior
to the Affordable Care Act,” Lee said. “Covered California is now firmly
established in a pattern where good rates lead to good enrollment.”
The reinsurance and risk adjustment programs are two of
three premium stabilization programs in the Affordable Care Act that are
commonly known as the “three R’s.” CMS is scheduled to release the results of
the third program, the risk corridor program, later this year.
The full CMS report can be viewed here: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/RI-RA-Report-Draft-6-30-15.pdf.
On the next page is a summary of reinsurance and risk
adjustment payments and transfers for plans participating in Covered
California.
On the next page is a summary of reinsurance and risk
adjustment payments and transfers for plans participating in Covered
California.
Covered California is set to release its 2016 rates at the
end of July, and open enrollment for 2016 coverage is scheduled to begin Nov. 1.
In the meantime, special enrollment for those who experience a change in life circumstances,
such as moving or having a baby, continues year-round.
For more information on Covered California’s special
enrollment, and to find out who is eligible, visit www.CoveredCA.com/individuals-and-families/getting-covered/special-enrollment.
Medi-Cal enrollment and Covered California for Small Business enrollment also
continue year-round.
About Covered California
Covered California is the state’s marketplace for the
federal Patient Protection and Affordable Care Act. Covered California, in
partnership with the California Department of Health Care Services, was charged
with creating a new health insurance marketplace in which individuals and small
businesses can get access to affordable health insurance plans. Covered
California helps individuals determine whether they are eligible for premium
assistance that is available on a sliding-scale basis to reduce insurance costs
or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can
then compare health insurance plans and choose the plan that works best for
their health needs and budget. Small businesses can purchase competitively
priced health insurance plans and offer their employees the ability to choose
from an array of plans and may qualify for federal tax credits.
Covered California is an independent part of the state
government whose job is to make the new market 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.
