California's health insurance marketplace announced on Wednesday that it will order insurers to add a 12.4% surcharge to silver-level plans, citing uncertainty over whether the Trump administration will pay ACA subsidies.
With the surcharge, the average premium increase for affected policies will be nearly 25%. Silver-level plans are the second-least expensive option among the exchange's four levels of coverage, and it's the only tier that benefits from the cost-sharing subsidies that President Donald Trump has repeatedly threatened to eliminate.
The California exchange market took several steps to try to protect consumers from the surcharge's financial blow. Silver-level plans sold outside of the state exchanges will not be subject to the hike. Those plans are offered to consumers who make too much money to receive federal subsidies.
Peter Lee, the executive director of Covered California, said the largest exchange in the country had to protect the markets after receiving no reassurances from Washington about the subsidies' future.
"Covered California worked hard to come up with a plan that ensures a stable market and protects as many consumers as possible from an unnecessary price hike," Lee said in a statement released Wednesday.
Statewide, rate increases will vary by insurer, anywhere from 8% to 27%. Anthem's 135,419 customers will see a 37.3% increase, significantly higher than any other insurer. The second-highest premium increase came from Molina Healthcare at 28.6%.
Even with the added surcharge, Covered California said 78% of subsidized consumers will see no change in what they pay. The remaining 22% of the market will see higher net premiums, about half of which would be less than $25 a month.