Expert says health care affordability will continue to decrease in California’s 2023 marketplace

According to data recently released by the California Health Care Foundation (CHCF), California health plans insured 34.3 million enrollees in 2021. 

 

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Of these enrollees, 14.1 million were covered by commercial plans, 14.7 million were covered by public managed care plans, and 5.5 million were covered by administrative services only arrangements. 

For public managed care plans, this represents a 9.3% increase in enrollees from the previous year. 

Kristof Stremikis, Director of CHCF’s Market Analysis and Insight team, told State of Reform that the increase in enrollment in public managed care plans expresses the growing importance of public managed care plans in the state health insurance marketplace.

“Public programs are just a critical and growing part of that marketplace,” he said. “In 2021, it just continues to show evidence of this decades-long decline in the commercial employer sponsored market. So Californians are increasingly looking at public managed care programs to provide access to health care services … Those are really important to millions and millions of California families at this point.”

Stremikis said he believes the growing shift to public managed care plans as opposed to commercial plans stems from the lack of affordable healthcare in the state.

“It’s not something that’s unique to 2021 at all,” he said. “It’s something that’s been happening over the course of several decades now. I think certainly part of that has to do with the cost [of healthcare] and it is just increasingly unsustainable for employers to bear parts of these costs and for employees and people to afford health insurance. 

There are public programs out there now like Covered California that do have premium subsidies, which make the cost of care slightly more affordable, but it is very, very difficult to afford comprehensive health care coverage in the state of California and nationally, and that’s led to a decline in enrollment and certainly in the private market.”

The following chart shows state enrollment by health plan. 

 

Image: California Health Care Foundation

 

Stremikis said data like this can provide foundational information on where the state can focus efforts to improve care for the greatest number of Californians. 

“We can and should be asking very large regulators like [the Department of Managed Health Care], very large programs like Medi-Cal managed care, or some of the largest insurers in the state, how [they are] measuring and what [they are] doing to improve performance on something like racial equity, for instance,” he said. “These are the places that we can go and the people that we can go talk to when we’re looking to make change in the healthcare system.”

Stremikis expressed that, looking at this year’s marketplace, consumers can expect more significant premium increases and for the affordability of healthcare to continue to be a challenge for Californians.

“We already know the average increase for Covered California plans is going to be around 7%, and we know large employers nationally are expecting increases of at least around 6 and a half or 7%,” he explained. “I just have to say that’s really unwelcome news, given the burden that healthcare costs and premiums already posed for millions and millions of Californians. It is getting more expensive, unfortunately.”

Open enrollment started on Tuesday and goes through Jan. 31st.