Peter V. Lee is the executive director of Covered California. James C. Robinson is a professor of health economics at UC Berkeley.
California's Obamacare exchange negotiated a 4% average rate increase for the second year in a row, defying dire predictions about health insurance sticker shock across the country.
The modest price increases for 2016 may be welcome news for many of the 1.3 million Californians who buy individual policies through the state marketplace, known as Covered California.
California's rates are a key barometer of how the Affordable Care Act is working nationwide, and the results indicate that industry giants Anthem and Kaiser Permanente are eager to compete for customers in the nation's biggest Obamacare market.
Leading up to Monday's announcement there had been a steady drumbeat of news about major insurers outside California seeking hefty rate hikes of 20% to 40% for Obamacare open
enrollment this fall.
enrollment this fall.
Overall, 44% of Covered California customers said they found it difficult to pay their monthly premiums now, according to a recent survey. And some people have indicated that they feel shortchanged in terms of the doctors they can see and the service they get from their health insurer or the exchange when problems arise.
Free market forces can be a powerful tool to contain health costs. But for that tool to work, consumers need the support of an active purchaser that can go toe-to-toe with the insurers. Other states and the federal exchange would be wise to look at what's working in California.
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