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Open Enrollment 2016: Less New Members and a Lot of Switchers

by John Hansen

During Open Enrollment 2015, the Obamacare California Health Plan market grew by 500,000 new members. However, during Open Enrollment 2016, Covered California enrolled only 200,000 new members. Along with these new members, there were 300,000 switchers, people who changed plans during the Covered California Open Enrollment Period.

Why are people changing plans?

Top reasons for switching plans included doctors and price. Some people wanted to go to a specific doctor who didn’t take their old coverage, so they changed plans to get coverage that their physician would accept. Or, they wanted to be part of a larger network that offered more choices in medical providers.

Those who did not receive government subsidies tended to switch plans in order to find coverage their doctor would accept. Those enrolled on Obamacare California Plans through the Exchange more often changed plans due to price. Others decided to change because their medical coverage was too expensive.

Why do health insurance rates keep rising?

Health insurance premiums keep rising for various reasons. One of the most common reasons for a rate increase is due to a decrease in an individual’s government subsidy. The government offers up front tax credits to low income Californians on Obamacare health plans. However, due to change in income or household size, the amount of these subsidies can change.

Aging up can cause rates to increase. The older you are the more expensive health insurance will be in California or in any state. The ACA requires that premiums for older members between the ages of 60 to 65 be no more than triple the cost of premiums for insured people in their 20’s. That has helped older Californian’s save on health insurance costs, but still the fact remains. Older people pay more.

Yearly premium increases cause rates to rise as well. Due to cost of living, increased health care costs and more, health insurance rates tend to rise every year. In the first year of the Affordable Care Act, rates went up 8%. In the second year they only rose 4-6%. In 2017, rate increases in California are expected to exceed 10%.

However, these premium hikes are fairly modest compared to some other states. 27 states have seen rate increases of over 12%, and 20 states have had premiums go up over 20%.