By Peter V. Lee
With a global pandemic continuing to spread across our state, and millions of Californians impacted by the recession the virus triggered, the upcoming open-enrollment period for the 2021 year will be more important than ever before. In many ways, the Affordable Care Act – and the financial help and safety net it provides consumers – was made for moments like the one we have been experiencing over the past few months.
Millions of Californians have experienced a job-loss, often accompanied by losing their employer-based health insurance, or a reduction in their income. Most of them, however, do not need to go without coverage and can get either Medi-Cal or subsidized coverage through Covered California. Covered California will be focusing on three things to attract new consumers and retain current members when it begins the renewal and open-enrollment period in just a few months.
First, we begin with the overall cost of coverage. Thanks to California’s commitment to build on and strengthen the Affordable Care Act, Covered California was able to announce last month that the weighted average rate change in the state’s individual market for the 2021 coverage year will be 0.6%. This follows last year’s rate change of 0.8 percent, marking a record-low for the second consecutive year. The rates for these past two years were driven by California reinstituting the penalty for not having coverage and adding new state subsidies to supplement the financial help from the Affordable Care Act. These policies have resulted in a big increase in enrollment leading to healthier risk pool and lower costs. For consumers, many will see little to no change in their gross premiums.
Consumers both on and off the exchange will also benefit from Covered California’s competitive marketplace, which allows them to shop for the best value and save money if they switch plans. The average rate change for unsubsidized consumers who shop and switch to the lowest-cost plan in the same metal tier will be -7.3%, which means Californians may be able to get a lower gross premium than they have now if they shop and switch.
Once again, shopping for the best deal will be important for consumers, because as the carriers become more competitive on pricing and the cost of the second-lowest Silver plan decreases, consumers may find that the amount of their financial help is lowered.
Secondly, Covered California made the commitment earlier this year to respond to the pandemic by increasing our already substantial investments in marketing and outreach. We have budgeted more than $157 million to marketing, sales and outreach to reach into every corner of the state so consumers know that people who are financially insecure do not need to be health care insecure.
Finally, consumers will have even more choices next year as two carriers will expand their coverage areas. Anthem Blue Cross will be returning to Imperial, Inyo, Kern, Mono and Orange counties, and Oscar Health Insurance will begin offering coverage into San Mateo County. As a result, virtually all Californians (99.8%) will have two or more choices in 2021 and about four out of five (77%) will have four or more choices.
The financial help that we offer, through both federal and state subsidies, helps cover nearly 80% of the premium for consumers who earn between 200 and 400% of the federal poverty level. While their gross premium is near $600, the average subsidized consumers pays $130 for quality coverage through name-brand plans.
We recognize that these are very difficult times for Californians.The pandemic and the recession we now face are challenges that are putting our state, the Affordable Care Act, and each of us as individuals to the test like never before. Covered California relies on and works closely with the thousands of the certified insurance agents across the state. These professionals are truly on the front lines of helping Californians get and keep the coverage they need.
As California continues to demonstrate what can be done when you work together, we look forward to continuing our partnership with insurance agents and other enrollers in every community. We want to build on our work of getting as many people covered as possible by encouraging enrollment and provide additional financial help to give more consumers a pathway to coverage.
Peter V. Lee is executive director of Covered California.