Covered California For Small Business Remains Immune To Market Uncertainty

The small business branch of Covered California — the state’s public health exchange — seems to be stabilizing as the rest of the market remains in tumult.

Covered California for Small Business recently announced a 5.6 percent increase in premium rates for 2018, down from a 5.9 percent increase last year. The general Covered California exchange will see a 12.5 percent jump next year.

Unlike the rest of the exchange, the small business category is not federally subsidized. If President Donald Trump eliminates subsidies for Covered California, individual market enrollees on some plans could see up to a 24 percent spike in out-of-pocket costs.

There will be five plans in Covered California’s small business sector in 2018. Only Western Health Advantage exited the market, leaving 350 consumers to shop for new coverage.

“We think it’s a very competitive rate,” said James Scullary of Covered California. “Employers and employees will be able to choose not only which carrier they want to go with, but what level of coverage works best for them.”

Covered California said the small business exchange is a model for what a healthy public market could look like with the right support. It does not rely on federal funding the way the individual market does.

The uncertainty around the future of federal subsidies has already taken a toll on the general Covered California exchange. Anthem Blue Cross won’t be insuring Covered California enrollees in most regions in 2018.

Larry Levitt, vice president for special initiatives at the Kaiser Family Foundation, said the small business exchange is a good reminder that most insurance markets are afloat right now.

“There’s been so much focus on the individual insurance market and the challenges it’s been having, but it’s important for people to remember that most people get their insurance through an employer, or medicare, or medi-cal, and those parts of the health system are very stable,” Levitt said.

Membership in Covered California for Small Businesses has jumped 27 percent in the past year. The exchange now covers roughly 35,000 workers.