People enrolled in insurance through Covered California can expect an average rate increase of 13.2 percent in 2017.
Over the last two years, the rate increase has been about four percent.
The rate hike is the result of rising health care costs, pent up demand and the end of a funding mechanism in the Affordable Care Act known as reinsurance, which moderates rate increases, according to Peter Lee, executive director of Covered California.
"Health insurance premiums are a reflection of the underlying costs of delivering health care, and in particular we’ve seen specialty drug costs rising dramatically at a far higher rate than other health care costs," he says.
The rate increase also comes as a federal program designed to moderate rate increases in the first three years of the Affordable Care Act ends.
Lee says the one time adjustment will add four to seven percent to premiums in 2017.
But he also says consumers may see a smaller increase or pay less for insurance if they switch to a new plan.
"Seventy-eight percent of consumers can, by shopping, find the lowest priced plan of the same benefit level see increases of no more than 5 percent," he says.
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