California saw huge jump in health insurance premiums under ACA

Over the past year, many Americans have seen their insurance premiums increase – potentially significantly – as a result of the changes to the health care laws that came with the Patient Protection and Affordable Care Act's coverage mandate. This seems to have become an even greater problem in one of the nation's most populous states in particular.

Many California residents saw their health insurance premiums jump between 22 and 88 percent this year, according to a report from the Los Angeles Times. However, Dave Jones – the state's insurance commissioner – recently stated that he is optimistic insurers will ease up on these increases. He noted that by the time the latest proposed increases are released, Californians will be ready to vote on Proposition 45, which would allow for more stringent rate regulation by the state.

The variations in what consumers would pay for their health insurance was based on many factors, the report said. That included their age, gender, the kind of policy they carried, and the part of the state in which they lived. Fortunately for the low-income residents who only obtained coverage because of the ACA's insurance exchanges were largely unaffected by these changes because of how the government subsidized their plans. Further, the increase data didn't include group insurance coverage including those for employer-sponsored plans.

So who was hit hardest?
When it comes to the people who saw these increases put the biggest dents in their budgets, it seems that the youngest adults buying their own coverage were the ones shelling out the most additional money, the report said. On average, 25-year-olds in part of Los Angeles County were paying 52 percent more for the exchanges' “silver” plans than for comparable policies last year, compared with only a 38 percent increase for those who were 55 years old. And because California has no legal authority under its current laws to create regulatory restrictions until (or unless) Prop 45 is passed, Jones warned that more increases could be in the offing.

Health insurance companies might want to take this opportunity to find more ways to offer consumers the most affordable coverage options available while still keeping themselves insulated from significant risk. Striking the right balance between low costs and reasonable coverage may help to attract a greater number of customers both on and off the exchanges.