Calif's Health Insurance Exchange Sets Plans, Premiums; No Apparent 'Rate Shock'
Update: Aug. 7, 2013: Covered California announced Wednesday that 12 insurance companies have formally signed contracts with the agency to offer plans on the new marketplace. Since the initial announcement (below), one company, Ventura County Health Plan, has withdrawn from offering coverage on the marketplace. The following companies will offer plans on the marketplace, although not all companies will offer plans in every region of California:
· Alameda Alliance for Health
· Anthem Blue Cross of California
· Blue Shield of California
· Chinese Community Health Plan
· Contra Costa Health Plan
· Health Net
· Kaiser Permanente
· L.A. Care Health Plan
· Molina Healthcare
· Sharp Health Plan
· Valley Health Plan
· Western Health Advantage
Last week, Covered California announced tentative plans and premiums for its small business marketplace, also called SHOP.
The state's health insurance exchange, Covered California, announced Thursday morning the plans and premiums that will be available to millions of Californians.
And what everyone wants to know is: how much will it cost. Experts had warned of "rate shock," that premiums might skyrocket for all kinds of reasons. That has not happened.
Covered California says that individuals will pay an average premium of $321 per month for a "silver" plan. (More on silver plans below.) Many people will be eligible for subsidies to reduce that cost further.
Across the state, people who had been working toward this day seemed to heave a collective sigh of relief.
"This is a home run for consumers in every region of California," said Peter Lee, executive director of Covered California, in a release to reporters. "Californians should be proud of how not only health plans in this state, but doctors, medical groups and hospitals have stepped up -- creating a market that will allow millions of consumers to enroll in affordably priced products."
Charles Bacchi, executive vice president with the California Association of Health Plans called it an "important day" and commended both insurance companies and providers for working together "to deliver quality, affordable health care. We couldn't have done this without providers willing to join us to make the Affordable Care Act a success," he said in a reference to provider groups working to keep rates low.
The plans on the exchange are required to offer a standard set of comprehensive benefits. It's hard to compare premiums next year to what's in place this year, since there is no standard set of benefits at present. Covered California chose as the best comparison the average premium for a small business plan. The rates in Covered California range from 2 percent above to 29 percent below that benchmark.
"It's nice to have a good news day in California," said Daniel Zingale, senior vice president of The California Endowment. "It turns out there's power in numbers when it comes to … health plans."
13 Plans Selected for the Insurance Exchange
The selected plans and premiums are still subject to review by state regulators. Covered California has picked 13 plans, including Anthem Blue Cross, Blue Shield of California, Health Net and Kaiser as well as many regional plans and some country-sponsored health plans. Those include Alameda Alliance for Health, Chinese Community Health Plan, Contra Costa Health Services, L.A. Care Health Plan, Molina Helathcare, Sharp Health Paln, Valley Health Plan, Ventura County Health Care Plan and Western Health Advantage. You can look up your own region and see what plans and premiums you can choose from.
Plans will be offered in tiers of coverage: platinum, gold, silver, bronze. The platinum plans have the highest premiums but you will pay less when you see the doctor; the bronze plans have the lowest premium, meaning you will pay more when you see the doctor.
The "silver" plan mentioned above is in the middle. It has the same standard set of benefits as the other plans, and has a $2,000 annual deductible. Still, preventive care and some other services are outside the deductible -- people would pay only a co-pay when they see the doctor.
When setting an individual's premium, insurance plans in the exchange may look at only three factors: age, where you live and family size. Insurance companies may no longer use your health condition or your health history to set premiums. People may no longer be turned down for pre-existing conditions.
Subsidies are available for people making from 138 to 400 percent of the federal poverty level – or about $15,500 to $45,000 for an individual or about $31,000 to $92,000 for a family of four.
Breakdown on Premiums, Before and After Subsidy
Covered California provided tables of average rates for a 21-year-old and a 40-year-old single person. For the 21-year-old buying the most affordable silver plan, the premium is $216 per month. But depending on income, the 21-year-old may get a subsidy, making the price that person would pay range from $44 per month to $216 per month.
The premium for a 40-year-old buying the most affordable silver plan will be $276. But depending on the subsidy, that 40-year-old will pay from $40 to the full $276.
Starting this fall, people will be able to go online and look up plans and rates across the board for themselves or their families.
"Everything will be quite standardized and literally charted out," said Betsy Imholz, special projects director for Consumers Union. "So you can look across lines and compare plans."
On average, people in the larger metropolitan areas in California will be able to choose from among five different plans. Covered California says that even in rural areas where options have typically been sparse, people will have two or three health plans to choose from.
"We were particularly concerned about Californians in rural parts of the state," Zingale said. "So it's a relief to see that they will have doctors, hospitals and health benefits available in those areas."
But not everyone was delighted. Jay Nelson is a 33-year-old attorney who lives with his wife and three children in Oakland. Nelson does not have employer-based insurance, although his firm is looking into options. He has been unable to afford insurance for his family. Nelson said he was disappointed the premiums were not cheaper.
"We're exactly in that income level that is essentially uninsurable," he said. "We make too much money to qualify for any help, but we don't make enough money to pay for this … comfortably."
Bacchi acknowledged that while the Covered California premiums are generally "positive news," that's not the case for everyone. "The reality is that there are some people who will pay more than they currently pay. That's because the Affordable Care Act requires increased benefits and it also imposes less cost sharing on the enrollee through deductibles and co-pays."
Plans and premiums for Covered California's small business exchange are expected to be announced in June, and a major education and outreach campaign will launch this summer.
Listen to a discussion of the new plans and premiums on KQED's Forum: