But many people will still be paying higher premiums next year as Covered California kicks in than they are now, the Los Angeles Times reported. The benefits insurers will be required to supply are also going up.
"These rates are way below the worst-case gloom-and-doom scenarios we have heard," Peter Lee, executive director of Covered California, said. "But let's be clear, some consumers will have prices that go up. There may be some sticker shock."
Lee and other supporters of President Obama's healthcare plan say the California experience shows it can work. Starting in January, health insurance will be mandatory for most U.S. residents with penalties for those who do not purchase it.
While states like California have set up their own health-insurance exchanges, others, mostly ones dominated by Republicans, have opted out, letting the federal government do it for them.
California has set up 19 regions with residents in each having between three and six insurers to choose from.
California Insurance Commissioner Dave Jones said he was hoping for more competition.
"There are only three statewide health insurers selling in Covered California, which means less statewide competition than we'd hoped to see in the new marketplace," Jones said.
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