How California is combating uncertainty over the ACA
California’s exchange is funneling millions of extra dollars intro promoting enrollment and giving the federal government an extra month to commit to paying next year’s cost-sharing reduction subsidies before it allows insurers to hike 2018 rates.
And to keep insurers from exiting the exchanges, Covered California also said it will allow plans that incur unexpected losses due to federal policies and uncertainty, such as questions around enforcement of the individual mandate, to recoup those losses over the next three years. The ACA gives state regulators the power to limit insurers’ profits. On the flip side, insurers that reap unanticipated profits next year due to changes in existing federal policies would have to lower their rates in the future.
The steps taken by Covered California are one example of how state-based exchanges could mitigate the problems caused by the uncertain policy environment, said Larry Levitt, senior vice president at the Kaiser Family Foundation.
California’s exchange is known for being one of the most successful ACA marketplaces. It has managed to keep insurer participation high while holding annual premium increases relatively low. Eleven health plans competed for enrollees in California’s individual market this year.
Still, Anthem, one of the largest health insurers in the state, earlier this month said it is withdrawing from 16 California pricing regions, where 153,000 residents are enrolled in Anthem plans. It will remain in three regions, where it covers 108,000 people.