By Daniel Weintraub
California Health Report
California consumers got their first glimpse Wednesday at the insurance coverage that will be available later this year when the state implements the federal health reform known as the Affordable Care Act.
The benefit plans and the first-year cost to consumers who will be eligible for federal subsidies were unveiled by Covered California, the agency in charge of implementing the new federal law, which Congress and President Obama adopted nearly three years ago and the US Supreme Court upheld last summer.
The state is not yet able to say what the total cost of the plans will be, including the portion that will be footed by taxpayers in the form of subsidies and by small business, if they choose to shop on the new online exchange on behalf of their workers. Those numbers will come later, once insurance plans put together their networks of doctors, hospitals and labs and tell the state how much they expect to charge.
But Wednesday’s announcement was significant because it demonstrated how all consumers, not just those eligible for the federal subsidies, might find shopping for coverage easier once the insurance industry begins offering plans that meet the new state requirements.
“Consumers will be able to make apples to apples decisions that they have not been able to make in the past,” said Peter Lee, executive director of Covered California. “We are changing the focus of health insurance from being a shell game, hiding from consumers what’s covered and not covered…to providing the best care possible to (help consumers) stay healthy and get care when they need it.”
All plans sold on the exchange will be ranked according to four levels: platinum, for the most expansive benefits, then gold, silver and bronze.
Platinum plans will generally come with higher monthly premiums and will pay 90 percent of a consumer’s health care costs. Gold plans will pay 80 percent, silver will pay 70 percent and bronze, which the state described as a catastrophic coverage, will pay 60 percent. But all the plans also come with annual limits on how much consumers will have to pay out of pocket.
Ken Wood, a Covered California senior adviser, said all consumers will benefit by knowing that, say, a silver-rated plan from one insurance company offers the same benefit package as a silver plan from another.
“They don’t have to worry about something in the fine print changing dramatically what will be covered,” he said.
As an example, a family of four with an income between about $22,000 and $35,000 buying a silver-rated plan will pay between $39 and $118 per month.
The lowest income among them will pay $39 monthly and will have copays limited to $4 for a primary care doctor visit, $6 to see a specialist, $8 for urgent care and $4 for a generic drug prescription.
Even low-income families would still face steep bills for more serious illnesses. Hospital stays would cost $250 per day up to a family maximum of $4,500 a year, including the cost of all co-pays.
For middle-income families with earnings up to about $59,000, their share of the premiums for a silver plan would be capped at $395 per month, but they would still face a $1,500 deductible that would be their responsibility before insurance kicked in to cover its 70 percent share. The maximum out of pocket cost for such a family would be $10,400 per year.
The plans offered through the state-run exchange will not be able to deny people coverage because of pre-existing medical conditions, a rule that will apply to all insurance once the federal reform takes full effect next year. The plans will also carry no annual or lifetime limits on the amount of care for which a consumer can be reimbursed.
The state also went live Wednesday with a web site – www.coveredca.com — that has information about the benefits and costs and a calculator that consumers can use to estimate what their tab will be. By Oct. 1, the site is supposed to allow consumers who do not get coverage from their employer or from the state Medi-Cal program to begin buying insurance that will kick in on Jan. 1 2014.
The insurance industry has been working with the state on the design of the plans and the online exchange, but one group offered a cautionary statement Wednesday.
Patrick Johnston, President and CEO of the California Association of Health Plans, said the new program “may reduce confusion” and its subsidies will help “millions of Californians secure quality health care coverage.” But Johnston said the federal law’s cost-sharing mandates will also increase the cost of insurance for many people – especially the young and the healthy.
“New taxes, limits on geography-based pricing and age rating restrictions are all part of the Affordable Care Act that will drive up the cost of coverage for millions of consumers and employers,” he said. “We will see in the coming months whether the standardized benefit designs adversely impact premiums or not.”