Covered California customers to see 4.2 percent increase in costs

Covered California customers to see 4.2 percent increase in costs »Play Video

SACRAMENTO, Calif. (AP) — State officials say Californians buying individual health coverage on the statewide exchange will see their costs rise by an average of 4.2 percent in 2015, about half the increase the industry has seen in the past three years.

Peter Lee, executive director of Covered California, announced preliminary premium rates on Thursday. He called it good news that shows the Affordable Care Act is working as the state enters the second enrollment year of President Barack Obama's overhaul.

Lee said 10 of the 11 health plans are returning to the exchange, indicating the insurance companies are profiting from the system.

Health care advocates welcomed the announcement, saying it shows the federal law is helping to slow down runaway insurance rates.

The preliminary rates will now go to state regulators for approval.