As Open Enrollment season gets underway, many of you are wondering about the cost of premiums for health insurance coverage in 2016. Ever since the passage of the Affordable Care Act in 2010, we have noticed a steady increase in the price of health insurance. The good news for the upcoming year is that the trend toward higher premiums has slowed considerably! The average Californian will see about a 4 percent increase in their health insurance premiums for 2016, a welcome relief from our fears of rising prices.

However, control over premium increases was achieved by making certain changes to most health insurance plans. Covered California calls this the “benefit design”, or the core set of features that are common to all health insurance plans. Changes to the benefit design include:

  • deductibles for many basic services have been eliminated
  • many prescription medication costs have been capped
  • emergency services and hospitalizations will be more expensive, especially for those who choose Bronze tier plans with low premiums and high deductibles

Nearly 90 percent of Californians enrolled in Covered California receive subsidies (Source: LA Times) to help with the cost of their health insurance premiums, so your bigger concern might be your out-of-pocket costs such as copays and deductibles. As you shop the marketplace during this Open Enrollment season, pay special attention to how copays and deductibles have changed. After all, if your premium rises slightly, your subsidy might help enough that you barely notice a difference. But the real changes will lie in your out-of-pocket expenses.

Covered California negotiates with health insurance providers to offer plan designs and premium rates, with the goal being better, more efficient, and more affordable health care for everyone. Of course, some of the burden is on consumers to weigh trade-offs of health insurance plans. The individual health insurance marketplace allows consumers greater freedom of choice, but also requires a degree of self-education. For more information on the different tiers of health insurance coverage, or for help choosing the right plan for your family, call our office at 951-676-8800.