Covered California™ (the Health Benefits Exchange in California) has announced 13 health insurance plans that will offer health care coverage to millions of Californians in 2014. The plans reflect a mix of large non-profit and commercial plans, along with well-known Medi-Cal and regional plans.
The tentative selection of health plans is subject to a rate review by state regulators. It is difficult to make a direct comparison of these rates to existing premiums in the commercial individual market because in 2014, there will be new standard benefit designs under the Affordable Care Act, and the actual change in an individual’s premium will depend on the person’s current insurance coverage. However, Covered California believes that a valuable frame of reference for its premiums, is comparing them to the small employer market in California. Both the small employer market and Covered California are competitive markets, and offer guaranteed issue – no one can be denied due to pre-existing conditions.
The rates submitted to Covered California for the 2014 individual market ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions. This is impressive since the 2014 products include doctor visits, prescriptions, hospital stays and more essential benefits.
There is a maximum out-of-pocket cost of $6,350.
Consumers will have access to more than 80% of practicing physicians, 80% of acute care hospitals through 13 commercial health plans. Virtually every health plan designed a custom network for Covered California. For example, Blue Shield said its network for Covered California policies will include about 24,000 doctors, not the 66,000 that are in its full statewide PPO network. Networks are not yet final. Health Net said that it plans to seek approval to use its full network for at least one plan offered through Covered California.
Covered California plans to help consumers with an online tool that will enable to determine which doctors and hospitals are available in each plan.
Blue Shield also said that its average rate increase for existing individual policyholders would be 13%. Subsidies available through Covered California will actually reduce costs for many people. Two months previously, an actuarial report released by the State projected average increases would be 30%.
Covered California’s selection process was designed to result in a portfolio of plans that achieve three objectives: a robust choice of offerings throughout the state, affordable prices, and access to doctors and hospitals. The terms of Covered California’s relationship with its partnering health plans means they will collaboratively work to promote care improvements, foster prevention, and seek to reduce costs by promoting better care.
Once rates for these plans are approved by state regulators, Covered California plans to sign the final contracts and begin the work of enrolling millions of Californians in the following health plans:
- 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
On average, there will be five plans from which individuals can choose in each of the 19 different rating areas around the state. In rural areas where choice has been historically sparse, there will be two or three health plans. Throughout the state consumers will have a choice of Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Exclusive Provider Organizations (EPOs).
Plans embraced Affordable Care Act programs such as Accountable Care Organizations and Patient-Centered Medical Homes, that seek to improve care while lowering costs. Plans also used narrow networks that enabled them to offer lower premiums.
The current list of insurers is for individual policies only. Covered California will announce its options for small businesses to buy health insurance in June.
California was the first state to create a health benefit exchange following the passage of the federal health care law. Covered California is charged with creating a new insurance marketplace in which individuals and small businesses can get access to health insurance. With coverage starting in 2014, Covered California will help individuals compare and choose a health plan that works best for their health needs and budget. Financial help will be available from the federal government to help lower costs for people who qualify on a sliding scale. Covered California is an independent part of state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and Legislature.
Covered California will begin enrolling people on October 1 for a January 1 effective date.
DMEC Legislative Updates 
I have Kaiser through San Joaquin County however last year I dropped my 23 and 24 year old from coverage because I could not afford the increased cost of coverage. Open enrollment is in June of 2014 and I plan on putting them back on the Family plan unless they can be denied. Will I pay or my daughters have to pay a tax for not having coverage starting Jan 1st 2014 since we have to wait until open enrollement?
Your children could not be denied the opportunity to be added to your coverage. They also cannot be denied individual policies, either through the new Covered California Exchange (Marketplace) or directly from an insurance company. The rules as to who has to pay the tax are complex; generally, adult children would have to pay the penalty themselves.