News Release

Date Posted

New Analysis Shows That Coverage That Is Being Promoted as Part of Proposals in Washington Would Put Coverage Out of Reach for Many Americans


  • A recent report from CMS found that skimpier coverage under the American Health Care Act (AHCA) would have the effect of more than doubling deductibles from $3,000 per year to $7,250.
  • Analysis finds that using AHCA subsidies to fund “no-cost premium plans” would leave many consumers with no access to care because of high deductibles and reduced benefits.
  • Deductibles could range from $10,000 to $39,000 a year for consumers in median-cost counties, and up to $58,000 in high-cost regions with AHCA subsidies as the basis for purchasing coverage.

SACRAMENTO, Calif. — Covered California released an analysis Wednesday that shows that some deductibles would need to be as much as $58,000 a year under one proposal being floated during the current health care debate in Washington. The proposal introduces the concept of “no-cost health plans” that are fully funded by the reduced financial assistance offered under the American Health Care Act (AHCA).

“All health insurance coverage is not created equal,” said Peter V. Lee, executive director of Covered California. “The low subsidies and ability of states to waive benefit rules in the AHCA would result in coverage that is far worse than what many consumers saw prior to the Affordable Care Act. The prospect of fewer benefits and dramatically higher deductibles than the least expensive plan currently offered by Covered California means all too often coverage would be in name only.”

A recent report from the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary (OACT) found that cost sharing under the AHCA would be about 61 percent higher. Using current Patient Protection and Affordable Care Act benefit designs, this means that a Silver-tier plan would move from having an annual deductible of $3,000 to an annual deductible of more than $7,250 under the AHCA.

Covered California’s analysis also examined the idea of automatic enrollment into “no-cost” health plans, an idea suggested in a recent Health Affairs blog, to provide one window into whether the subsidies proposed in the AHCA would be adequate to meet consumers’ needs. The analysis found that deductibles could actually be much higher than the OACT projection. In this system, insurers would need to dramatically raise deductibles and reduce benefits so the plans could be completely paid for by the tax credits provided in legislation designed to replace the Affordable Care Act.

The chart to the right shows the impact the new deductibles would have on consumers in three age groups (27, 40 and 60) who live in low-cost, median-cost and high-cost counties. In a median-cost county, consumers would have to cover the first $10,000 to $39,000 in expenses before their deductibles would be met and the insurance would cover the costs of needed care. In a high-cost county, the deductibles could range from $17,000 to $58,000.

“This analysis is timely as the Senate considers making a proposal to reform the Affordable Care Act,” Lee said. “A central question that needs to be asked of any replacement legislation is not just how many Americans stand to lose coverage, but to what extent would we return to the pre-Affordable Care Act days when millions who thought they had coverage faced the reality of exclusions, very high deductibles and gaps in coverage that made care unaffordable.”

Health plans available through Covered California have patient-centered benefit designs, which increase the number of services that are available without being subject to a deductible.

Most outpatient services in Silver, Gold and Platinum plans are not subject to a deductible, including primary care visits, specialist visits, lab tests, X-rays and imaging. Even consumers in Covered California’s most affordable Bronze plans are allowed to see their doctor or a specialist three times before the visits are subject to the deductible.

The lead author of the analysis, “The American Health Care Act Would Deliver Coverage in Name Only for Many With Unaffordable Deductibles,” is Covered California’s Chief Actuary, John Bertko.

“In the coming days, analysts need to scrutinize the nature of coverage being offered given the size and structure of the subsidies,” Bertko said. “This analysis seeks to spotlight those issues, and based on what we know today, the policies being discussed in Washington would be practically worthless to the vast majority of consumers.”

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.

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.



Covered California’s Board Takes Action to Provide Stability to the Market in the Face of Federal Uncertainty


  • Covered California adopted a $314 million budget which highlights its ongoing stability and includes a continued commitment to maintaining a healthy mix of consumers which helps keep premiums low.
  • Covered California moved to protect consumers, whether they are on or off-exchange, from premium increases caused by uncertainty at the federal level.
  • New data from CMS shows California and other states retained a far higher percentage of consumers than those in federal marketplaces.

SACRAMENTO, Calif. — Covered California’s board approved a budget that highlights its ongoing stability and continues its significant commitment to marketing and outreach to reach consumers. The board also adopted a new policy that provides stability to the market and helps reassure health insurance companies that have expressed concern about participating in 2018 in the face of continued uncertainty regarding the federal government’s funding of cost-sharing reduction (CSR) reimbursements.

“In the face of federal uncertainty, Covered California is doing everything we can to stabilize the market and protect consumers,” said Peter V. Lee, executive director of Covered California. “Today’s action allows Covered California to give our plans clear direction and assurances for the coming year – while insulating consumers from the higher premiums caused by a lack of direction at the federal level.”

The Patient Protection and Affordable Care Act includes two types of financial support for those who qualify: monthly premium support (the Advanced Premium Tax Credit, or APTC) and cost-sharing reductions which are available only to Silver plan members when they seek care. Currently the federal government has only committed to funding CSRs through the month of May 2017, with no guarantee it will continue.

Without a commitment to fund the CSR reimbursements, some health plans may not participate in 2018. The plans could leave midway through the year or raise their rates. In the absence of a clear and reliable policy from the federal government that it will provide CSR funding through 2018, Covered California’s board acted to place any rate increases caused by the uncertainty only onto Silver plans. While Silver level consumers will see an increase in the gross cost of their premiums, they will also see an increase in the amount of financial assistance they receive, leaving their net payment virtually the same. (Full detail and board materials are available here: http://board.coveredca.com/meetings/2017/06-15/index.shtml.)

However, a previous Covered California analysis found the federal government would spend $4 billion more on funding the increased subsidies than it would on funding the CSR reimbursements in 2018 alone, and tens of billions of dollars would be added to the federal budget over 10 years.

“There is no logic in the federal government not continuing the way it currently funds cost-sharing reductions,” Lee said. “Not only do they help low-income consumers afford health care, but they also save billions of dollars in federal taxpayer money.”

In addition, Covered California will require plans to offer a separately rated, non-mirrored Silver plan off exchange that is nearly identical to the Covered California patient-centered benefit design. These plans would not include any premium increase connected to the lack of CSR reimbursements and should mitigate the impact of any rate increases on approximately 1 million unsubsidized consumers.

Covered California’s board also approved a $314 million budget for Fiscal Year 2017-2018 that contains no state funding and highlights its ongoing stability. Covered California’s revenue comes exclusively from a small monthly surcharge that health plans pay for each enrollee. The budget includes a continued commitment to building and maintaining one of the healthiest consumer pools in the country, with $106 million devoted to marketing, sales and outreach.

“We continue to hear claims that our health care system is collapsing, but we know that this is not the reality in California,” said Covered California Board Member Paul Fearer.

“This is a rock solid budget, one that highlights our stability and keeps us on a path for continued success.” Lee added. “Marketing is not only important to getting people to sign up for coverage, it is important to getting people to stay covered.”

At the board meeting, Covered California also reviewed new data from the Centers for Medicare and Medicaid Services that confirms the importance of some of the exchange’s policy decisions, including its commitment to marketing and outreach. Data analysis slides can be found here: http://www.coveredca.com/news/pdfs/Effectuation_Report_to_the_Board_of_Covered_California-6-15-17.pdf. The data shows:
  • California and other state-based marketplaces retained a higher percentage of paying consumers in 2016, 94 percent, compared to those retained in the 35 states served by the federally-facilitated marketplaces (FFM), (85 percent).
  • Of those who left the marketplaces, Covered California survey data has found that 85 percent of Covered California consumers moved to another source of coverage; the just released CMS data found the comparable rate for consumers enrolled in states supported by the FFM was only 49 percent – meaning, far more left those markets to be uninsured.
“More research is needed to fully understand the reasons why state-based marketplaces are performing better than those through the federally-facilitated marketplaces,” Lee said. “One clear lesson appears to be that marketing pays off.”

Covered California identified a variety of reasons that could be responsible for the dramatic differences in results.
  • Marketing matters: Covered California has invested in year-round marketing based on the fact that consumers come in and out of Covered California as their needs change. This “churn” is why marketplaces must continue to market coverage during open enrollment and special enrollment.
  • Special enrollment engagement: Covered California actively promotes special enrollment, ensures agent compensation and engages service channels throughout the year to lead to strong enrollment during this time.
  • Benefit designs: Covered California’s patient-centered benefit design allows consumers to access health care services that are not subject to a deductible, which provides value and leads to high levels of consumer retention.
  • Individual market stability: Covered California has had a stable group of health plans since our launch in 2014, leading to plans investing to retain their members.
“This report highlights the important role and responsibility of the federal government and shines a light on a disturbing trend,” Lee added. “What is clear is that Covered California is doing a good job for consumers – and our hope is that the Administration will take steps toward stabilizing all the marketplaces by not only funding the CSR reimbursements, but doing the marketing that is an essential benefit.”

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.

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.



New Analysis Shows Covered California’s Risk Mix Improving and Remaining Stable and Strong


  • California’s risk score improved from 2016 to 2017, indicating a healthier mix of consumers who have enrolled in coverage.
  • Analysis shows what health insurance exchanges like Covered California can do when they work on behalf of consumers.
  • Covered California has shared data with health plans in advance of rate negotiations for the past three years, helping plans “price right” — but unprecedented federal policy uncertainty makes 2018 premiums potentially more variable than ever.



SACRAMENTO, Calif. — A new analysis shows that Covered California continues to attract a healthy mix of enrollees, and the overall health of its enrollees improved from 2016 to 2017. This data is key to Covered California’s stability and will be used to help shape and inform rate negotiations with its 11 qualified health plans for 2018.

“We continue to attract a healthy mix of enrollees, and this is further evidence that the individual market in California is stable and strong,” said Peter V. Lee, executive director of Covered California. “A healthy pool of consumers means lower premiums, resulting in lower costs to those who do not receive financial help and receive less federal spending.”

The study, titled “Amid ACA Uncertainty, Covered California’s Risk Profile Remains Stable,” was posted earlier this week on Health Affairs, a prominent website devoted to health policy and issues affecting health and health care. Covered California released an expanded description of the results of the analysis, “Covered California Continues to Attract Sufficient Enrollment and a Good Risk Mix Necessary for Marketplace Sustainability.”

According to the data, California’s risk score dropped from 1.11 in 2016 to 1.09 in 2017, indicating that the current population is healthier, with respect to chronic conditions, than it was a year ago.

In addition, new enrollees in 2017 have an approximately 16 percent lower mean risk score than renewing enrollees, which is an improvement of 4 percent between 2016 and 2017. This suggests that Covered California is successfully attracting healthy enrollees to stabilize the risk pool.

The analysis continues California’s trend of having a healthy pool of consumers. While it used a different methodology, the Centers for Medicare and Medicaid Services determined California had the lowest “average plan liability risk score” in the individual market in both 2014 and 2015. In 2016, California continued to have one of the lowest risk scores in the nation.

Lee pointed to four key reasons why California has been successful in attracting a healthy mix of consumers:
  • The expansion of coverage linked to providing financial help through federal tax credits is bringing a healthy mix of consumers into the individual market and keeping them there.
  • Covered California continues to invest significantly in marketing and outreach, recognizing that there is high turnover in the individual market.
  • Unlike many other states, California converted all health coverage in the individual market into “compliant” plans and created one common risk pool as of 2014.
  • Health plans through Covered California offer patient-centered benefit designs, which allow consumers to access a wide variety of care that is not subject to a deductible, meaning consumers get more value from their coverage.
“Doing early analysis of California’s risk mix is important because we can share this information with health insurance carriers during rate negotiations to get the best value for California’s consumers,” Lee said. “While we are doing what we can to provide health plans with the certainty they need to set their premiums as low as possible, there is still significant uncertainty among health plans because of the lack of clarity around whether there will be direct federal funding of cost-sharing reduction payments and continued enforcement of the individual mandate.”

Last month Covered California released an analysis that showed health plan premiums could rise up to 49 percent, and up to 340,000 Californians would drop from coverage, if cost-sharing reduction reimbursements were no longer directly made to carriers, and the individual shared responsibility payment were not enforced.

Health insurance carriers have begun the process of negotiation in California to develop rates for 2018.

“Health insurance carriers need certainty, and without confidence that the federal support for cost-sharing reduction payments will be made for 2018 as they have for the past four years, they will need to raise their rates and it will actually cost the federal government billions of dollars more,” Lee said. “There is still time to remove this specter of uncertainty and take the concrete steps necessary to keep the marketplaces stable, protect consumers and preserve coverage for millions of people.”

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.

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.


Statement from Peter V. Lee on the House Passage of the American Health Care Act

Click for Español

SACRAMENTO, Calif. — Covered California Executive Director Peter V. Lee released the following statement on the passing of the American Health Care Act by the U.S. House of Representatives:
“Today the House of Representatives took a significant step toward making what could be monumental changes to the U.S. health care system and the lives of millions of Americans. The passage by the House of the American Health Care Act is the first step in a long and ongoing process. The bill will now move to the Senate, which will revise, amend and then take its own action on this proposal. Then, the House and Senate must seek to reach an agreement on their different approaches. 
Covered California has been part of putting in place changes that have brought health care within reach of millions of Californians. We have analyzed the American Health Care Act, and as currently structured, it would greatly increase the ranks of the uninsured and increase costs for millions more. We will continue our work to both assess the potential impacts of new policies and focus on assuring that we administer the law that exists today.
The debate over the past six months has made crystal clear that changes in health care do not happen overnight. Consumers who have coverage today are protected and Covered California will keep our members informed of anything that may affect them. We will continue to engage to ensure that our experience in delivering high-quality, affordable health care informs the ongoing debate.”
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.

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.

New Analysis Shows Potentially Significant Health Care Premium Increases and Drops in Coverage If Federal Policies Change


  • California’s premiums could rise by 28 to 49 percent in 2018, and up to 340,000 consumers could lose individual market coverage if changes are made to existing federal policies.
  • The potential rate increase would mean billions of dollars in additional federal spending. The 1.2 million consumers who do not receive subsidies would bear the entire brunt of these increases.
  • The potential decrease of 340,000 insured consumers would not only represent many individuals losing access to potentially life-saving care, but it would result in a sicker risk mix in the individual market and higher premiums for everyone.

SACRAMENTO, Calif. — A new analysis shows the dramatic consequences facing Californians if federal policies are changed from the current structure and there is no longer direct federal funding of cost-sharing reduction (CSR) reimbursements and the individual shared responsibility payment is not enforced when a consumer chooses not to purchase coverage.

The analysis found that Covered California health plan premiums could rise up to 49 percent if two key elements that have been in place for the past four years are changed: Cost-sharing reduction reimbursements are no longer directly funded as reimbursements to carriers, and the shared individual responsibility payment is not enforced.

“California and the majority of markets across the nation are stable and working right now, but the possibility of changing the rules of the industry is threatening to upend markets and put consumers at risk,” said Peter V. Lee, executive director of Covered California. “This specter of uncertainty could lead to dramatically higher rates, but there is still time to take the concrete steps necessary to keep the marketplaces stable and preserve coverage for millions of people.”

The analysis, commissioned by Covered California and conducted by PricewaterhouseCoopers (PwC), also found that without CSR reimbursements and enforcement of the individual responsibility payment (sometimes called the individual mandate or individual penalty), up to 340,000 Californians would drop from coverage in the individual market in 2018.

“Failure to support cost-sharing reduction subsidies results in significant increases in premiums, in particular for unsubsidized Silver plans. Fewer people would participate with these higher premiums, which would lead to a drop in coverage in the unsubsidized market,” said Sandra Hunt, principal at PwC.

“Our analysis also highlights the critical importance of enforcing the individual mandate,” continued Hunt. “If federal policy were to change and the individual mandate were not enforced, not only would premiums rise significantly, but up to 340,000 could lose health coverage.”

In addition, a previous analysis conducted by Covered California found that due to a requirement for carriers to build cost-sharing reduction payments into premiums, discontinuing funding directly to carriers would result in increased federal spending. Costs would rise by more than $4 billion in 2018 alone, and tens of billions of dollars would be added to the federal budget over 10 years.

“Because of the interplay between rising premiums and premium subsidies, the federal government would end up paying tens of billions of additional dollars if they do not fund the cost-sharing reduction subsidies,” said Lee. “There is no logic to not funding cost-sharing reductions. They achieve two important goals: They help low-income consumers afford health care, and they allow the federal government to spend less.”

Lee urged the federal government to provide clarity on these issues as soon as possible, since health plans are finalizing rates that need to be locked down by June 15, 2017.

“Stopping the funding of CSR reimbursements, or even leaving the payments up in the air, would mean carriers would raise their prices to account for the uncertainty — costing the federal government billions in higher subsidy payments,” Lee said. “Even more important is the enforcement of the penalty, which boosts enrollment, builds a healthier pool of consumers and lowers premiums for everyone.”

The high potential rate increases would lead to hundreds of thousands of subsidized individuals deciding to go without insurance. For those who decide to keep their coverage, they would likely face relatively little impact, since their federal subsidies would also increase. The 1.2 million Californians on the individual market who do not receive subsidies, both in Covered California and off exchange, would pay the full cost of any premium increases.

The full analysis can be found here: http://hbex.coveredca.com/data-research/library/CoveredCA_Impact_to_CA_ind_market_4-27-17%20(1).pdf.

“While Californians face significant uncertainty, in many other parts of the nation the premium increases would be far larger, and it is possible that many areas would have no health plan offering coverage in the individual market,” Lee said. “The cost of inaction or indecision is high and consumers, particularly those who do not get any financial help, will end up bearing the cost.”

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.

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.

Options to Stabilize the Individual Market Can Reduce Federal Spending and Lower Premiums

Analysis Shows Failure to Fund Cost-Sharing Reduction Subsidies Would Raise Rates and Cost the Federal Government at Least $47 Billion Over the Next 10 Years

  • Without direct federal funding of cost-sharing reduction (CSR) payments, premiums would rise 15–20 percent, leading to higher federal premium subsidy payments.
  • Due to a requirement for carriers to build these payments into premiums, federal spending would increase by more than $47 billion over 10 years, while non-subsidized individuals would also face far higher premiums.
  • Providing a temporary risk stabilization fund for 2018 and 2019 of $15 billion per year would promote carrier participation, lower premiums by 15 percent and only incur federal spending of $3–5 billion per year due to decreased subsidy spending.

SACRAMENTO, Calif. — Covered California on Friday shared with the Congressional Budget Office (CBO) an analysis that shows that a decision not to provide ongoing direct federal funding for cost-sharing reductions would have immediate and dramatic effects on rates, federal spending and the viability of exchanges across the nation.

“The impact of not providing direct federal funding of cost-sharing reductions is enormous, and not only puts the viability of the individual market in many states in peril, but would be a bad deal for the federal budget — costing more than $47 billion over the next 10 years,” said Peter V. Lee, executive director of Covered California.

“Without the direct federal support for cost-sharing reductions, some health plans will leave the individual market entirely, and those who stay will raise rates significantly,” Lee said. “While the market in California is likely to be relatively stable, for other states there is grave uncertainty. But what is certain is that not funding cost-sharing reductions would actually cost the federal government billions more because of the interplay between rising premiums and subsidies.”

Covered California’s analysis was conducted by Covered California Actuary John Bertko with assistance from UCLA economist Wes Yin. The analysis shows that the federal government would see increased costs of more than $47 billion over the next decade if funding for cost-sharing reductions were discontinued. The $47 billion is the net cost to the federal government after accounting for the $135 billion in savings from defunding funding CSRs. It reflects the difference between premium costs over 10 years of $788 billion if no CSRs are provided vs. $606 billion if CSRs remain in place.

Cost-sharing reductions are provided to help lower the cost of accessing health care for consumers with incomes below 250 percent of the federal poverty level for Silver Tier plans. The funding is provided directly to health insurers. If federal support for the program is discontinued, health plans would still be required to lower those costs at point of care, but they would take steps to make up for the lost funding by increasing premiums across the individual market.

“Without the direct funding of cost-sharing reductions, we estimate that health plans would increase premiums by 15 to 20 percent, which in turn would increase federal spending on premium subsidies by 30 percent,” Bertko said.

The communication to the Congressional Budget Office also included analysis showing that spending $15 billion to stabilize insurance markets now, in the form of reinsurance, would reduce premiums and thus reduce federal premium subsidies, meaning a net cost to the federal government of just $3–5 billion per year.

“Providing $15 billion in risk stabilization funding in the form of reinsurance would not only stabilize markets by keeping plans in markets they would otherwise exit, it would mean lower rates for all consumers in the individual market,” Lee said. “The impact of temporary risk stabilization funding would be to lower premiums in 2018 by about 15 percent. The actual cost in federal spending would be far lower than the benefit because of the reduced subsidy payments.”

“While the political debate continues over the future of health care in America, the sensible step in the short term — for both consumers and the federal budget — is to directly fund the cost-sharing reductions as complements to the tax subsidies and to provide funding to stabilize markets.”

Lee said that exchanges now have five years of operational experience, so they have unique insights into the interplay between rates and federal costs.

Covered California and other state exchanges will soon enter into rate negotiations for 2018. “Health plans need far more certainty than they have today to determine whether to participate and how to set their prices for 2018,” said Lee. “The window for action is closing, and if plans do not have a clear path forward by June of this year, next year could be a bad year for consumers and the federal budget.”

The analysis was shared in a letter sent Friday to Keith Hall, director of the Congressional Budget Office.

“We’re sharing this analysis with the CBO today and urging them to take an in-depth look at the way curtailing federal spending around the ACA in some areas could actually cost the federal government more,” Lee said. “It’s important for federal policy makers to understand the impact of short-term decisions, even as they weigh longer-term change.”

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.

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.

Covered California Releases Regional Analysis of Support Provided to Consumers Under the Affordable Care Act Compared to Changes Proposed in the American Health Care Act


  • Analysis shows lower-income Californians, particularly those who are older and live in high-cost areas, would be negatively impacted by the proposed changes.
  • Updated analysis using Congressional Budget Office findings and historic trends finds that premiums are likely to be 15 to 20 percent higher under the American Health Care Act.
  • Under the American Health Care Act, many Californians would need to spend more than a quarter of their income on health insurance premiums.

SACRAMENTO, Calif. — Covered California released a new analysis on Monday that goes into greater detail regarding how consumers could be impacted by the changes in financial assistance proposed under the American Health Care Act (AHCA).

The latest figures take into account the recent Congressional Budget Office (CBO) analysis and detail how consumers would be affected in all 19 of California’s rating regions for non-group coverage.

“We have made great progress in reducing California’s uninsured rate to a historic low of 7.1 percent,” said Covered California Executive Director Peter V. Lee. “The main reasons for that are that the financial assistance currently available helps many afford coverage, and for those not receiving subsidies we have kept premium increases to historically low levels. The current AHCA proposal would dramatically reduce financial assistance for most Californians while increasing costs for those who do not get help.”

The CBO examined the AHCA and determined that health insurance premiums would be 15 to 20 percent higher in 2018 and 2019 than they would have been under existing law. The amount of tax credits under the proposed legislation would be 60 percent of what is provided under the current law.

The result would be that some older Californians, particularly those who are lower-income and live in higher-cost areas, would see large increases in their costs, requiring them to spend a significant amount — or even their entire income — to maintain their health insurance coverage.

“The proposed changes to the subsidy structure would put coverage out of reach of many,” Lee said.

The examples below compare the financial help that consumers would receive in 2020 based on the current Patient Protection and Affordable Care Act (ACA) subsidies — which consider a consumer’s age, income, family size and where they live — to the proposed age-based-only subsidies of the AHCA.

For example, under the age-based subsidy structure, consumers purchasing the second-lowest-cost Silver plan would fare very differently depending on their income and where they live:
  • In Sacramento under the ACA, a 27-year-old earning $17,000 would pay 3.7 percent of her income toward health insurance premiums ($622 per year or $52 per month). By contrast, under the AHCA that individual would be asked to spend nearly 25 percent of her income on her health insurance premium, paying $4,036 per year or $336 per month.
  • In Kern County, a 62-year-old earning $30,000 a year would pay 8.3 percent of his income toward health insurance premiums ($2,494 per year or $208 per month under the ACA). If the AHCA were in effect, he would be asked to allocate more than 30 percent of his income to health insurance, paying $9,182 a year or $765 per month.
  • Finally, in Monterey County, a 62-year-old earning $17,000 would receive support under the ACA to limit her premium to 3.7 percent of her income ($622 per year or $52 per month). Yet under the AHCA, this consumer would have to spend 100 percent of her income on her premium and would still fall short of what it would take to purchase a plan that costs $17,873 per year, or $1,489 per month.
Covered California provided data for consumers aged 27, 40 and 62 years old who earn $17,000; $30,000; or $75,000 per year in each of California’s 19 rating regions. The premium projections estimated premiums and tax credits in 2020 under both the AHCA and ACA, using Covered California’s trend of a 7 percent average rate change during its first three years of operation to establish a “baseline” of what ACA coverage would cost.

Lee says the AHCA does address some of the gaps in our current health care system, such as providing needed financial assistance to those above 400 percent of the federal poverty level.

“The proposal addresses the real challenges for some Californians on the ‘cliff,’ of being at 400 percent of the federal poverty level. However, the proposal does not take into account what people earn or the cost of where they live. As a result, many of the most vulnerable Californians will be priced out of coverage under the proposed system,” Lee said. “The likely result is a smaller and less healthy risk pool, which would mean higher premiums for everyone in the individual market.”

The data for all scenarios, in each of Covered California’s rating regions, can be found here: http://coveredca.com/news/pdfs/AHCA_ACA_comparison_chart.pdf.

Now that open enrollment has ended, Covered California is focused on its special-enrollment period. Consumers are eligible to sign up now if they experience changes in their life circumstances, such as losing their health care coverage, getting married, having a child or moving.

For more information on special-enrollment rules, visit: www.CoveredCA.com/individuals-and-families/getting-covered/special-enrollment.

Consumers who qualify for Medi-Cal may enroll through Covered California year round.

For more information, consumers should visit CoveredCA.com, where they can enroll online or get information about obtaining free, confidential in-person assistance in a variety of languages. They can find a certified enroller at a storefront in their area 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.

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.

Covered California Wins National Public Relations Award for Enrollment and Outreach Efforts


  • Covered California was recognized for its bus tour promoting enrollment in health insurance across the state with community partners.
  • Outreach helped attract a good mix of insurance consumers to help keep premiums low.
  • The award was for the “Best in Public Sector” work in the industry.

SACRAMENTO, Calif. — Covered California’s outreach and earned media efforts to promote enrollment have been recognized by the prestigious PRWeek US Awards, which celebrate the best in public relations and public affairs work.  

Covered California, working in partnership with Ogilvy Public Relations, was recognized as the “2017 Best in Public Sector” awardee for the 2015–16 “Spotlight on Coverage” campaign and bus tour.

The campaign focused on reaching California's diverse communities and helped drive awareness and enrollment. The Spotlight on Coverage bus tour traveled 2,500 miles and included 42 stops in communities across the state.

“This award is not just for Covered California, but for the many community partners across the state who have worked with us to get the word out about affordable health coverage,” said Peter V. Lee, executive director of Covered California. “Attracting what actuaries call a good ‘risk mix’ requires strategic thinking and investment, and we are very proud to be recognized for the hard work involved in this outreach campaign.”

Covered California currently has about 1.3 million consumers enrolled in coverage through its exchange, and has one of the nation’s best “risk mixes,” the term actuaries use to indicate the ratio of younger and healthier consumers to those who may have chronic conditions or need more care.

Covered California’s initial analysis showed that the number of young adults signing up for 2017 coverage comprised a large proportion of its new enrollees for the second consecutive year.

Young adults in the crucial 18- to 34-year-old demographic accounted for an estimated 37 percent of this year’s plan selections, compared to 38 percent in the open-enrollment period for 2016, 34 percent for the open-enrollment period for 2015 and 29 percent for the open-enrollment period in 2014.

Lee credited supporters across the state with helping make the enrollment tour a success.

“We cannot do this work alone,” he said. “We’re grateful for the support we have from strong partners — government, business and nonprofit health advocates — who work with us to promote the importance of health insurance coverage.”

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.

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.