Health Exchange Discloses Plans, Rates
Calling it a historic day for healthcare, the head of the state's health benefits exchange introduced on Wednesday a benefits structure for the more than 30 health plans that will be offered to consumers in 2014.
Peter V. Lee, the executive director of Covered California, touted the plans that will be offered on its exchange as consumer friendly and transparent.
“There will no longer be a shell game, with what is covered being hidden,” Lee said at a Wednesday press conference that also included consumer advocates and the head of the Massachusetts Health Connector. That exchange, which was launched nearly a decade ago, is the imprimatur for how states will offer coverage under the Patient Protection and Affordable Care Act, which was signed into law three years ago next month.
Under the ACA, at least four levels of coverage must be offered: platinum, gold, silver and bronze, with patient co-pays ranging from 10% to 40% of the entire cost of coverage. Individuals and families earning below $94,200 in annual adjusted gross income would qualify for sliding scale subsidies in the form of tax credits.
As part of a structure offered by Covered California, moderate income families would pay as little as $39 a month for a mid-level silver policy, which has maximum annual out-of-pocket costs of $4,500. For a family that earns between $58,875 and $94,200, the premium would range between $395 and $746 a month.
“This is not a poverty program,” Lee observed, adding that the coverage is expected to appeal to middle-class families that cannot obtain affordable coverage elsewhere.
Ken Wood, a Covered California senior advisor, acknowledged that the maximum out-of-pocket costs for higher-income families – $12,800 – represents “a lot of money – but having their exposure limited to (this amount) is a breakthrough,” and added that it would lead to fewer medical-related bankruptcies.
Altogether, about 2.6 million Californians are eligible for subsidized coverage, according to Wood.
And Lee noted that Covered California went beyond federal law by reducing primary co-payments for enrollees in the lowest income bracket.
“A family of four knows they can get good health insurance, and pay as little as $4 to see a doctor,” he said.
Open enrollment for Covered California begins on Oct. 1, with coverage becoming effective next Jan. 1. Officials said the exchange had launched a Twitter stream, and would buy television and radio advertising in order to market it to the general public.
The launch of the exchange generally drew praise from both consumers and the payer community.
“This offers an easy apples-apples comparison for health plans, and this is the first time this is ever being done,” said James Guest, chief executive officer of Consumers Union, which publishes the influential magazine Consumer Reports. “California consumers will no longer be denied coverage, there are no surprises or gimmicks, and benefits are the same from one carrier to the next.”
Patrick Johnston, chief executive officer of the California Association of Health Plans, said the uniformity of the benefits “may reduce confusion among consumers about the differences in pricing among plans,” but cautioned that premiums may be driven up by the changes.
