San Luis Obispo County residents who buy health insurance through Covered California will have one more choice when they select an insurer for 2016.
Covered California announced this week that United Healthcare has been approved to sell insurance on the exchange in 34 under-served counties, including San Luis Obispo. In the two years that Covered California has been operating, SLO County residents have been limited to two insurer choices — Blue Shield of California or Anthem Blue Cross — which drew criticism from people because of the limited options.
Preliminary premium rates for 2016 also were announced last week with an average increase statewide of 4 percent — slightly lower than the 4.2 percent average increase for 2015. State officials hailed the numbers as evidence the exchange is keeping rates in line through competition as insurers vie for the 1.3 million customers buying health plans through Covered California.
In San Luis Obispo County, the average rate increase is 4.4 percent for 2016, although that varies considerably depending on what plan is chosen; many people could even see their premiums drop.
Covered California requires insurers to offer four tiers of insurance — bronze, silver, gold and platinum — with bronze being the least comprehensive. The most popular statewide and in San Luis Obispo County has been the silver tier that covers 70 percent of medical costs. Premiums for the cheapest silver plan available drop by about 3.8 percent in 2016, while premiums for the cheapest bronze plan will jump by about 6.9 percent.
People who already have insurance through Covered California could save 2 percent if they switch to the lowest-price silver plan in 2016, instead of just renewing their current policy.
“As consumers move toward renewing their 2016 coverage, we encourage them to shop around,” said James Scullary, a spokesman for Covered California.
Scullary said San Luis Obispo should benefit by the addition of United Healthcare, the largest private health insurance company in the nation. When Covered California launched two years ago, United joined Aetna and some other insurers in opting to stay away. United changed its mind after watching the marketplace perform and was allowed in on a limited basis for 2016, along with a New York startup called Oscar (which will sell only in Orange and part of Los Angeles counties).
“We are happy to welcome United into Covered California and San Luis Obispo County,” Scullary said. “This addition will help establish a more competitive environment for consumers.”
The addition of United and Oscar means 12 insurance companies will be offering policies through Covered California in 2016, with consumers in urban areas such as Los Angeles having as many as seven insurers to choose among.
In November, Covered California Executive Director Peter Lee took a swing through the state promoting the health insurance exchange in advance of signups for 2015. During his stop in San Luis Obispo, he acknowledged that counties with one or two choices needed more options and promised the situation would be addressed for 2016.
While United Healthcare may have added a little competition in San Luis Obispo County, it didn’t help much for consumers in Monterey, Santa Cruz and San Benito counties, where rates will climb by an average of 12.8 percent — the highest in the state. Rates in Southern California have climbed the least, with average rates in Los Angeles rising 1.8 percent, although savvy shoppers could reduce their premiums by as much as 11 percent from last year.
“The sheer numbers and overall health of our enrollees allowed us to sit down with the health insurance companies and negotiate rates downward, which will save our consumers more than $200 million in premiums,” Lee said this week.
In San Luis Obispo County, for example, a 40-year-old person earning $47,080 per year who buys a silver health plan would pay monthly premiums of $377 with Anthem Blue Cross, $324 with Blue Shield, and $377 with United Healthcare.
About 90 percent of Covered California customers qualify for a federal subsidy to help with premium costs, based on their income.
Covered California will post 2016 health insurance plans on its website on Monday. Open enrollment will start Nov. 1 and extend through Jan. 31, 2016.