SACRAMENTO -- Most consumers who bought health care plans through Covered California, the state's health-insurance exchange, will see low rate hikes in 2015, while some will see no increase or even a decrease, exchange officials said Thursday.

The average California rate hike of the plans created by the nation's health care law will be 4.2 percent, but some plans will offer average rates that are 8.5 percent lower.

By comparison, state exchanges in Washington state and New York have reported average rate increases of 9.6 percent and 13 percent, respectively.

"It's good news for Covered California, and it's good news for the Affordable Care Act," Peter Lee, the exchange's executive director, said at a news conference at Covered California's new headquarters.

***Asian woman did not wish to be identifiable photographed or give her name***A woman waits to speak with an insurance counselor during a Covered
***Asian woman did not wish to be identifiable photographed or give her name*** A woman waits to speak with an insurance counselor during a Covered California enrollment session at the main library in Fremont, Calif., Saturday, March 22, 2014. Bilingual counselors were on hand to assist applicants. (Anda Chu/Bay Area News Group)

Lee attributed the lower rates to competition between health plans as about 1.4 million enrollees signed up during the health care law's first open-enrollment period from October through mid-April.

That number greatly surpassed experts' expectations, and about 88 percent of those who signed up received federal subsidies.

While initial enrollment saw older and sicker individuals sign up, Lee said, enrollees who joined plans from January through March were much healthier, which led to a balanced risk pool.

Thursday's announcement was the second dose of good news this week for California supporters of the Affordable Care Act, commonly called Obamacare. A Kaiser Family Foundation study released Tuesday said nearly 6 of 10 previously uninsured Californians now had coverage.


Advertisement

But others, including state Insurance Commissioner Dave Jones, some consumer activists and some health care experts, say it's still too early to declare Obamacare a success in the Golden State.

They said the lower rates unveiled Thursday are politically motivated because health insurers want to avoid enraging consumers before they vote on Proposition 45 in November. The measure would require health insurance companies to get state approval before raising rates, as they must do in 35 other states.

The tentative rates negotiated between Covered California and 10 health care plans that will be offered on the exchange beginning Nov. 15 are expected to be finalized in October by both the Department of Insurance and the Department of Managed Health Care.

But while officials at both departments can review the rates, they have no power to reduce rates they deem excessive. Proposition 45 would remedy that, Jones said.

Robert Laszewski, a nationally renowned health care policy expert, said the threat of Proposition 45 to insurers should be obvious to any Californian.

"Other states that had very successful exchanges saw rate increases in the 10 to 12 percent range -- and California's is only 4 percent?" he said. "Are you suspicious?"

Lee dismissed that notion, saying that the low rates are unrelated to the proposition.

Instead, he said, it has do with the fact that the exchange enrolled more than a million people, which created a better risk pool. Moreover, he said, insurers wanted to maintain lower prices to keep their new exchange customers and attract new ones.

Lee also said many consumers who now receive subsidies may see increases in their premiums, but in many cases it will be offset by increases in their subsidies. And some plans, he noted, have responded to the consumer outcry over reduced physician and hospital networks by agreeing to widen them.

Other consumer activists and health care advocates were pleased with the rates Lee outlined Thursday.

Anthony Wright, executive director of Health Access California, called the state "ground zero for the crisis of the uninsured in America" because California insurers were infamous for offering some of the "worst rates in the nation, and double-digit rate increases year after year," before Obamacare.

STATEWIDE OBSERVATIONS
The overall "weighted average" increase is 4.2 percent.
Sixteen percent (217,000 people) of Covered California consumers will see health care premiums stay constant or decrease. Most decreases will range from 1 percent to 3 percent, but some will decrease as much as 14 percent.
Thirty-five percent (489,000 people) will see premiums increase a small amount -- less than 5 percent.
Thirty-six percent (495,000 people) will see premium increases of 5 percent to 8 percent.
Thirteen percent (186,000 people) will see premium increases of more than 8 percent.
Source: Covered California

AVERAGE HEALTH INSURANCE RATES
San Francisco: 6.6 percent
Marin, Napa, Solano and Sonoma counties: 5.4 percent
Contra Costa County: 3.8 percent
San Mateo County: 3.7 percent
Santa Cruz, San Benito and Monterey counties: 2.9 percent
Alameda County: 2.8 percent
Santa Clara County: 1.0 percent
Source: Covered California