January 10, 2017

New Study Shows Covered California Consumers Saving and Paying Much Less Than Expected for Quality Health Care Coverage

  • Competitive market allows consumers to save money by shopping.
  • The average purchase price for health plans in each metal tier has been more than 10 percent below the average offered price for three consecutive years.
  • Consumers now have through midnight on Friday, Jan. 20, to sign up and have their coverage start Feb. 1.

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SACRAMENTO, Calif. — A new independent study by The Commonwealth Fund found Covered California consumers are protecting themselves from rate changes and paying much less than the average price of plans by shopping for the best value. The study looked at the policies Covered California consumers purchased between 2014 and 2016 and found the average price paid in each year has been between 11 and 15 percent less than the average price of the plans offered.

“This study shows how Covered California consumers are being smart and saving money by shopping,” said Peter V. Lee, executive director of Covered California. “Consumers are getting the best value, which means most are paying far less than ‘the average’ premium.”

Among the study’s key findings:

  • The study found consumers in each metal tier paid 11.6 percent less than the average price offered in 2014, 13.2 percent less in 2015 and 15.2 percent less in 2016.
  • When measured as an average purchase price, consumers saw a premium increase of 2 percent over the 2014–15 period, and 3 percent over the 2015–16 period.
  • Consumers responded to rate changes by shifting to lower-cost plans. In 2016, 62 percent of new enrollees and 56 percent of renewing enrollees chose the lowest- or second-lowest-priced plans available.
  • The findings suggest Covered California is helping to moderate cost growth. The researchers say, “Covered California demonstrates — straight out of Economics 101 — that if consumers have easy-to-understand, transparent information without being overwhelmed with too many choices, they will buy lower-premium products available on their tier.”

“Covered California’s competitive market is working and putting consumers in the driver’s seat,” Lee said. “With our patient-centered plan designs, consumers in the same metal tier get the same benefits, many of which are not subject to a deductible.”

The study can be found here: http://www.commonwealthfund.org/publications/in-the-literature/2017/jan/consumers-buy-lower-cost-plans.

Covered California also announced it is extending a key enrollment deadline for consumers who want their coverage to start on Feb. 1. Consumers will now have until Friday, Jan. 20 at midnight to sign up for health insurance that will begin at the beginning of next month.

“The original Jan. 15 deadline falls on a Sunday this year, which is in the middle of a three-day holiday weekend,” Lee said. “Covered California wants to make sure consumers have the time they need to examine their choices and choose the health plan that best fits their needs.”

Open enrollment runs through Jan. 31, 2017. Consumers who enroll between Jan. 21 and Jan. 31 will have their coverage start on March 1.

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.

In addition, small business owners can purchase affordable health insurance for their employees through Covered California for Small Business.

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.

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