Health Insurance Rate Shock Looms for California Consumers

◼ While calling for a special legislative session to ensure the Exchange is prepared to open for business, he (Governor Brown) also warned consumers of rate shock. - Loren Kaye/Fox&Hounds

“While every effort will be made to promote affordability, large rate increases in the individual insurance market are likely at the outset (of ACA implementation), due to the requirement to offer coverage to all individuals, provide a higher level of benefits, and due to a significant increase in enrollment which will increase demand for services.”
California is one of only 14 states (plus DC) that have both set up a state exchange and opted into expansion of its Medicaid program. Another 13 states have said “no” to both a state exchange and Medicaid expansion, while the rest are either divided on the issue or have not yet made a decision....

One area where California is not a leader is in understanding the trajectory of insurance costs for individuals and small businesses.

Many states and state-based organizations have analyzed how the ACA will affect health insurance premiums for small groups and individuals. This is important because the Act made significant changes in rating and benefit rules, which will not only change underwriting criteria, but also market incentives for policyholders. The studies commissioned by the various states and others have predicted significant rate shock for 2014.... MORE at the link.