UnitedHealth unit to join Covered California exchange

Managers of California’s state-based public health insurance exchange, Covered California, will be letting a unit of UnitedHealth Group Inc. (NYSE:UNH) compete in five of the lower-population pricing regions in the state in 2016.

Covered California managers have also given an affiliate of Oscar, a high-profile New York insurer that tries to “make health insurance suck less,” selling coverage in one pricing region in Los Angeles County and one in Orange County.

Covered California’s preliminary list of the twelve 2016 qualified health plan (QHP) issuers shows that one carrier that’s selling QHPs through the exchange this year, L.A. Care Health Plan, may leave the exchange in 2016.

Managers of the Patient Protection and Affordable Care Act (PPACA) exchange also released preliminary 2016 rates.

Covered California operates as an “active purchaser” exchange, meaning that it tries to make an active effort to negotiate with issuers for better rates and better benefits packages, not simply to verify whether issuers and QHPs meet minimum exchange listing requirements.

The average cost of the cheapest QHPs generally available to Covered California users, the cheapest bronze-level plans in each market, may rise just 3.3 percent in 2016, according to a preliminary 2016 price report.

This year, the cost of the cheapest bronze QHPs is 4.4 percent higher than in 2014.

The cost of the cheapest silver plans could rise just 1.5 percent, down from an increase of 4.8 percent between 2014 and 2015.

PPACA itself uses the cost of the second cheapest silver plan in a market as a benchmark for setting PPACA premium tax credit subsidy levels. The rate of increase in the cost of the second cheapest silver plan could fall to 1.8 percent in 2016, from 2.6 percent this year.

For consumers who are willing to switch to the cheapest QHP in any given “metal level,” the average rate should fall 4.5 percent between this year and next, the exchange says.

But, at press time, the California Department of Insurance and the California Department of Managed Health Care had not posted any of the issuers’ official 2016 rate filing applications, or any applications for individual, fully PPACA-compliant coverage taking effect after the start of 2015.

“The rate information in this book is preliminary, as it is still subject to public regulatory review,” the exchanges notes in its preliminary 2016 rate guide.

In Oregon, the insurance commissioner argued that many insurers’ proposed 2016 rate increases were too low. The commissioner ended up requiring some carriers to increase 2016 rates more than they had originally proposed.

The California Department of Managed Health Care will review the 2016 rate proposals from all 12 of the likely 2016 QHP issuers, and the California Department of Insurance will review one of the carrier’s proposals, the exchange says.

Once the rate proposals show up in the state rate review systems, members of the public will have 60 days to comment on the proposals