California has one of the most successful Obamacare exchanges in the country. Partly this is because California is a big state, which makes it a competitive place for health insurers. But it’s also because California is a liberal state and has done everything it can to make its exchange work well. That pays off.
Today, California announced rate increases for 2018. Here’s a summary:
- All 11 insurers who are in the market are staying in 2018.
- The price of the lowest-priced silver plan will go up 9.2 percent.
- This includes a one-time hit of 2.8 percent thanks to the implementation of ACA’s health insurance tax. Without that, the increase would be 6.4 percent.
- If consumers shop around, the average rate increase is 3.3 percent.
- Thanks to Donald Trump’s playground attempts to sabotage Obamacare by playing coy over preserving CSR subsidies for the poor, “all health plans in Covered California will add a surcharge of the amount needed to cover the costs of the CSR subsidy program to their on-exchange Silver-tier products.” The surcharge varies by region and insurer, but averages about 14 percent on top of the nominal rate increase.
- The surcharge will go away if Trump confirms that CSR subsidies will continue.
Of course, federal subsidies will go up too in 2018. Families with modest incomes—who make up 87 percent of the total—will see little or no net rate increase in 2018.