Statement: CoveredCA Announces Rate Increase for 2017

July 19, 2016

High drug prices is a reason for increase

SACRAMENTO – Covered California announced a statewide weighted average increase of 13.2% for 2017, which is due in part to the loss of the federal reinsurance program and the high cost of specialty drugs.

Given Senator Ed Hernandez’ leadership as chair of the Senate Health Committee, he released the following statement:

“Millions of previously uninsured Californians now have health care coverage because of the Affordable Care Act, but containing health care costs remains a challenge. While I am disappointed by this news, the rate increases are driven by the rise in underlying medical costs. It’s important to remember that prior to the enactment of the ACA, double-digit premium increases were the norm. To help with the transition toward full coverage for all Americans, the ACA included a mechanism to smooth out price fluctuation in the first few years. That mechanism is going away, which is part of the reason we are seeing this level of rate increases. However, with all of the choices consumers have through Covered California, individuals who experience large increases will likely be able to find a competing plan with a lower rate increase.

Another factor is the high cost of prescription drug pricing. That’s why I have been working on health care transparency measures such as SB 1010, which shines a light on drug prices to ensure affordable and accessible prescription drugs for Californians, and SB 908, which requires disclosure of unreasonable rate increases. As chair of the Senate Health Committee, my chief priority has been, and will continue to be, enacting policies to control the growth of health care costs. Expanding coverage to millions of previously uninsured Californians remains something we should celebrate.”

Click here to view the Covered California news release.

For more information on SB 1010, please visit our website.