Covered California says Merced County health care costs will rise by almost 10%

Health insurance rates for next year will increase almost 10 percent in Merced County – one of the highest jumps in the state and more than double the average rate hike statewide – Covered California officials announced Monday.

In 2016, the state’s average premium will climb 4 percent from original rates, a slight decrease from the 4.2 percent jump in 2015, said Peter V. Lee, executive director of Covered California. The slight reduction may cause many Californians to see a decrease in their health plan premiums.

But the rate increases vary by region. In Region 10, which covers Merced, Stanislaus, Mariposa, San Joaquin and Tulare counties, the average increase will be 9.8 percent. In 2015, rates in this area decreased by 1.9 percent.

By shopping around – moving to a lower-cost plan in the same tier – Merced-area consumers can bring down their premium hike to 6 percent, Lee said. In Monterey, Santa Cruz and San Benito counties, the average premium will rise 12.8 percent.

An area’s rate increase depends on provider competition, Covered California officials said.

More doctors, specialists and hospitals in a region could help lower premiums.

For example, neighboring Region 11, which consists of Fresno, Kings and Madera counties, will see an increase of only 3.3 percent. That’s because there are more providers in that area, officials said. That region also has six available insurance companies to choose from, while Region 10 only has four.

Alex Hernandez, a Covered California certified insurance agent in Merced, said he doesn’t expect the rate increase to affect consumers too much because as rates go up, so do subsidies. In the Merced region, 93 percent of consumers receive financial assistance to pay their premiums.

“If they’re getting subsidies, they’re going to be OK,” Hernandez said.

Northern California’s hikes are much larger than Southern California’s.

The average increase in Southern California is 1.8 percent, compared to 7 percent average in Northern California. Southern Californians can get better rates because the region has more provider competition.

The exchange also added two new participants for the first time – UnitedHealthcare, the nation’s largest health insurer, and a New York startup called Oscar. The state now works with 12 insurance companies.

The new insurance providers will be available to consumers in certain regions, but not in Merced.

This region is covered by Anthem and Blue Shield. Health Net and Kaiser Permanente are also available in parts of the region.

The announcement of low rate increases for most of the state was applauded by consumer groups and health advocates.

One of the main goals of President Barack Obama’s health overhaul was to slow increases in health care costs and premiums.

There had been some concern that some insurers around the country were requesting rate increases above 10 percent, saying their new customers turned out to be sicker than expected.

California hopes competitive prices will translate to strong enrollment later this year. Covered California signed up more than 1.3 million people during the second enrollment season. That figure fell short of an initial 1.7 million target.

Nearly 90 percent of Covered California enrollees qualify for financial assistance.

For 2016, an individual making between $16,242 and $47,080 may qualify for subsidies, while a family of four making between $33,465 and $97,000 may also qualify. Those making less would be directed to the state’s Medicaid program for the poor.

Covered California’s Shop and Compare tool for 2016 will be available beginning the week of Aug. 3.

This story was originally published July 27, 2015 at 3:47 PM with the headline "Covered California says Merced County health care costs will rise by almost 10%."