Defying dire predictions about health insurance rate shock across the country, California's Obamacare exchange negotiated a 4% average rate increase for the second year in a row. The modest increase for 2016, announced Monday, may be welcome news for many of the 1.3 million Californians who buy individual policies through the state marketplace, known as Covered California. California's rates are a key barometer of how the Affordable Care Act is working nationwide, and the state's performance is sure to be hotly debated among supporters and foes of the healthcare law, including the current crop of presidential candidates.
Many U.S. consumers have no doubt seen reports about the Affordable Care Act and predictions of significant increases in premiums in the very near future. Those worried about the projections should take note of the latest developments in California. The L.A. Times reported:
In case it's not obvious, a 4% average rate increase is tiny, and a small fraction of recent reports pointing to skyrocketing premiums. It's also much smaller than the kind of rate hikes that were common before "Obamacare" was signed into law.
What's more, as Mother Jones' Kevin Drum reported, with subsidy values also climbing a bit, and the even-more-modest increases in silver plans through the ACA, a lot of consumers are about to see their premiums shrink, not grow.
"I have a feeling this number is not going to be widely reported on Fox News," Kevin added.
That's a good line, but let's not brush past the underlying point too quickly.
California is, obviously, just one state, but it's easily the nation's largest. More to the point, it's also a Democrat state, which made a decision early on to embrace the Affordable Care Act, create a stable marketplace, and encourage competition for consumers' business.
The result is a well-run state system, operated by state officials who not only negotiated better rates for the public, but who also have no reason to sabotage "Obamacare" out of partisan or ideological spite.
In the coming weeks, other states are going to have similar announcements about premiums, and some states are going to fare better than others. But the questions consumers, especially in red states, should ask themselves is simple: "Did my state's officials do everything they could to implement the ACA effectively? Were it not for politics and ideology, would I be getting a better deal?"
Some states face unique challenges, but in general, "Obamacare" works best in states where officials want it to succeed. California's successes drives this point home nicely.