Most Californians On Insurance Exchange Are Sticking With Last Year’s Plan

When it comes to health insurance, Californians seem to value consistency.

Of the 944,000 people who were could renew their coverage for 2015 through Covered California, the state’s health insurance exchange, 94 percent stayed in the same plan that they were in last year.

About a third of them shopped for other plans available on the exchange, but few ended up making a change. The other two-thirds took no action and were automatically re-enrolled in their plan from last year.

Most Insurance Exchanges Just Got Bigger. Covered California Is Getting Smaller.

Executive Director Peter V. Lee said one reason was that the prices remained fairly consistent. “While consumers might have saved a few dollars by changing plans, they didn’t face draconian price increases if they stayed,” Lee explained during a conference call with reporters on Wednesday.

Larry Levitt, senior vice president at the Kaiser Family Foundation, called  the stability “stunning.” (Kaiser Health News is an editorially independent program of the Kaiser Family Foundation.)

“On the one hand, it may suggest that people were generally happy with the coverage they had,” he said. “On the other hand, it may suggest that people were confused or reticent to change even when they might save money.”

That sort of  reluctance to switch plans, he said, is also generally what happens in the Medicare Advantage and federal employee markets, “where inertia generally takes hold.”

“More active shopping would certainly put greater competitive pressure on insurers, but there’s also a lot of new customers in this market, so insurers still have an incentive to keep prices down,” Levitt said.

Attrition rates varied a bit by carrier in the Covered California market, but in all plans, at least 90 percent of consumers chose to stay. Kaiser Permanente, which is not affiliated with Kaiser Health News,  managed to hang on to 99 percent of customers who purchased coverage through Covered California.

In December, there were 1.1 million customers eligible for renewal through Covered California. Of those, 85,000 experienced drops in income making them eligible for Medi-Cal this year instead of subsidized private coverage. Covered California officials say they are still working with another 80,000 people who for various reasons could not be renewed within the exchange.

As of January 26th – about two months into this year’s open enrollment period – 273,000 new customers have enrolled in coverage through the state’s exchange.

Californians have until February 15th to enroll if they want coverage this year.

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