SACRAMENTO -- Covered California, the state's online health exchange established under the Affordable Care Act, today announced that 13 commercial health plans will take part in its individual marketplace, while introducing tentative premiums that vary from region to region.
The announcement of participating plans and monthly premiums on the individual side offers the first real glimpse of what type of plans at what price points will be available to some 5.3 million consumers across California, about half of whom will qualify for a federal subsidy.
Concerns about out-of-reach rates had persisted for months leading up to the announcement, with brokers and carriers wondering if enough plans would enter the exchange in order to keep prices competitive.
Early reaction, though, seemed cautiously optimistic, with a strong cross-section of health plans and seemingly competitive rates -- though the latter can depend on a number of factors and may not be the best for some consumers.
For Marin, Sonoma, Napa and Solano counties, region 2 out of 19 in the health exchange, the following health plans will participate, hoping to serve some 44,000 exchange-eligible residents: Western Health Advantage, Blue Shield of California, Anthem Blue Cross, Kaiser Permanente and Health Net of California. The only major HMO that operates in the North Bay absent from the exchange is United HealthCare, which joined major HMOs Cigna and Aetna in not participating in California's exchange.
Lake and Mendocino counties are part of region 1, where Anthem Blue Cross, Blue Shield of California and Kaiser Permanente will offer a range of plans. Some 97,000 residents in that region will be eligible for subsidies.
"I think that's a big win for the exchange," Victor McKnight, a principal at EPIC Insurance Brokers in Petaluma, said of the lineup of health plans. "That is a pretty strong offering. The have just about everybody. They definitely have choices."
Statewide, the remaining plans participating include a mix of public and private health plans, among them: Alameda Alliance for Health, Chinese Community Health Plan of San Francisco, Contra Costa Health Services, L.A. Care Health Plan, Molina Healthcare, Sharp HealthCare, Valley Health Plan and Ventura County Health Care Plan.
“We are proud to partner with Covered California for this historic moment in health care reform,” Western Health Advantage President and CEO Garry Maisel said in a statement.
Covered California will make a similar announcement about available plans in its Small Business Health Options Program, or SHOP, geared toward employers with 100 or fewer workers, in early June. Western Health has stated it intends to offer plans through that program, as well.
According to Covered California, the participating health plans and their provider networks make up for 80 percent of physicians and 80 percent of acute-care hospitals in the state.
While the number of plans in the exchange is an important metric, the monthly rates can range widely depending on a person's or family's income, or what region they are in. Those earning between 138 percent and 400 percent below the federal poverty line will be eligible for federal subsidies, which could make the premiums drop significantly for some but not for others. Additionally, plans offered through the exchange are tiered by "metal levels," with bronze on the lower end and platinum on the top end. Price and coverage depend on which level is selected, as well as age and region.
Peter Lee, executive director of Covered California, said it's impossible to directly compare its rates to existing premiums in the commercial market because, come 2014, new standards in benefit design will be mandated by the Affordable Care Act. Instead, Covered California compared today's individual rates to small group rates.
The rates, which are being reviewed by state regulators, across Covered California's individual market proposals range from 2 percent above to 29 percent below the 2013 average premium for small employer plans in the state's most populous regions, according to the exchange, which it considers impressive since all plans offer 10 essential benefits and guarantee issue, meaning no one came be dropped or charged more for a preexisting condition.
However, Mr. McKnight said that upon closer examination, the rates, while not excessive as some had feared, come with a few caveats. For instance, the difference between the lowest-tiered plan with a high deductible and the highest-tiered plan with a low deductible is far less than what it has been. That could spell the beginning of the end for high-deductible plans, which are favored by some employers and healthier individuals but can leave less healthy and low-income individuals underinsured.
Additionally, those with current individual policies will likely see their premiums go up, Mr. McKnight said, unless that person is eligible for the federal subsidy.
"There's going to be winners and losers -- in essence we're putting our system in a blender and coming out with something completely different," he said.
The Redwood Community Health Coalition, a network of 16 health centers across Marin, Sonoma, Napa, Mendocino and Lake counties, estimates that there are more than 110,000 local uninsured residents in those counties who won’t qualify for a Medi-Cal expansion under the law, but will qualify for financial assistance to purchase health plans through the exchange.
Many of those in between the Medi-Cal expansion and federal subsidies could face steeper premiums, but the flip side of that is that the health plan will likely offer better coverage because of the mandated essential benefits, Mr. McKnight said.
Individual consumers must either purchase insurance by Jan. 1, 2014, or pay a penalty under the Affordable Care Act. Enrollment for next January begins this October.
