Covered California rates to jump in Sonoma County, California

The cost of individual health coverage purchased through Covered California is expected to increase an average of 12.5 percent in Sonoma County next year, about double the size of the price hikes in the past two years under the federal Affordable Care Act.

But Covered California officials said Thursday that the increase is far less than the double-digit rate increases in the individual health care market prior to passage of President Barack Obama’s health care law. If you shop around, they said, you may end up paying even less next year for medical insurance.

“Almost 80 percent of consumers could see a reduction in what they’re paying right now or have a change of no more than 5 percent if they shop around at the same benefit level,” said James Scullary, a Covered California spokesman.

The 12.5 percent average increase applies to Covered California’s North Bay region, which includes Sonoma, Marin, Napa and Solano counties. Increases likely vary between counties in the region, Scullary said. The region saw average increases of 5.4 percent in 2015 and 6.6 percent this year.

Statewide, the price of health insurance sold through the exchange will increase an average of 13.2 percent, compared to 4 percent increases during the past two years.

The average increase in the North Bay region for an EPO plan offered by Anthem Blue Cross is 27.9 percent. Meanwhile, Kaiser Permanente’s HMO will see an average increase of 5.8 percent and Western Health Advantage’s HMO is expected to increase by 7 percent.

Covered California attributed the increases to the rising cost of health care, particularly specialty pharmaceuticals and an adjustment due to the end of Obamacare’s “reinsurance,” designed to moderate rate increases during the first three years while state health exchanges like Covered California were established. The end of reinsurance is expected to add between 4 and 7 percent to 2017 premiums.

Insurance companies said they are still trying to remain competitive in the individual market, despite rising health care costs.

“Our goal was to stay very competitive from a pricing standpoint,” said Rick Heron, spokesman for Western Health Advantage.

Heron said his company has been able to keep rates low because of its relatively healthy membership, but also because it has strong ties with hospitals and physician groups. He likened the health care model to that of Kaiser Permanente.

“And our partnership with our providers, the Meritage network, and the hospitals has kept our administrative costs low,” he said. “We’ve intentionally tried to stay very competitive in that region. ... We’ve always been closer to the Kaiser model because we’re integrated with physicians and hospitals.”

Darrel Ng, a spokesman for Anthem Blue Cross, said Anthem’s rate increase reflects “a deeper understanding of the markets in the post-ACA environment.” He pointed to an increase in the use of medical services, added drug costs and medical therapies, factors that need to be addressed to rein in health care costs.

“Anthem remains steadfast in its efforts to work with all stakeholders to help ensure the viability and long-term sustainability of Covered California,” Ng said.

Anthony Wright, executive director of Health Access California, a health care consumer advocacy coalition, said the rate increases may trigger a more substantial subsidy to help cover the cost of the insurance plan. The health plans are subsidized depending on a person’s income level.

“Frankly 90 percent of Covered California enrollees get subsidies so they don’t have to pay more than a percentage of their income,” Wright said. “Because the rates are increasing, that means that more people will be eligible for subsidies to afford coverage.”

But he said middle- and upper-income residents will likely have to pay more.

For those receiving subsidies - 87 percent in the North Bay region - a better deal may be obtained by shopping around and switching to a different insurance company, said Scullary, the Covered California spokesman. As many as five insurance companies will offer products in the region. Blue Shield will now offer an HMO in some ZIP codes at three benefit levels - silver, gold and platinum.

“Almost 80 percent of consumers could see a reduction in what they’re paying right now,” Scullary said, adding that some will see no more than a 5 percent increase if they shop around at the same benefit level, or metal tier.

You can reach Staff Writer Martin Espinoza at 707-521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @renofish.