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Coronavirus

California Health Insurance Rates Increase Slightly for 2021

SACRAMENTO, Calif. —- Health insurance premiums for the 1.5 million Californians who purchase coverage through the state marketplace will go up an average of 0.6% next year, officials announced Tuesday. It’s the smallest increase yet and is attributed to a surge of new signups coupled with a decline in health care use during the coronavirus pandemic.

More than 230,000 people have signed up for coverage since March 20, the day after Gov. Gavin Newsom issued a statewide stay-at-home order. Meanwhile, fewer people are using their health insurance as hospitals delayed elective procedures and some people chose to stay away from doctor’s offices.

Charles Bacchi, president and CEO of the California Association of Health Plans, said insurers can offer smaller increases because of new laws aimed at getting more healthier people to buy insurance.

From 2015 through 2019, monthly premiums in California’s marketplace increased an average of 8.5 percentage points per year. But since then, the Democratic-controlled Legislature and governor have passed laws aimed at getting more healthier people to buy coverage.

The result was an average premium increase of 0.8% in 2020. Next year’s increase is even lower, in part because of an increase in new people buying insurance during the coronavirus pandemic.

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