Covered California – Health Benefit Exchange
The Federal Health Insurance Reform Law (PPACA) requires each State to establish an “exchange” where individuals and small businesses can purchase health insurance. With this section of our web site we seek to educate people about the State of California’s health insurance exchange, called Covered California.
Health Insurance Exchange Product Offerings
Covered California (Health Benefit Exchange) will offer more than market-rate medical insurance. It will include information and enrollment assistance for these plans:
- Medi-Cal (medical care insurance for low-income people);
- Healthy Families (health care financing for children under age 18);
- Individual health insurance (market-rate coverage; with and without government subsidies); and
- Small Group Health Insurance (market-rate coverage for companies with 2-50 employees and later increased to 2-100 employees)
California was the first state to pass legislation to create an exchange. The California state law is referred to as the California Patient Protection and Affordable Care Act”(CA-ACA).
Covered California (Exchange) Board and its mission
A five-member board of directors governs the Covered California (Exchange). Current members of the “Exchange Board” include: Kim Belshe; Diana Dooley; Paul Fearer; Susan Kennedy; Robert Ross, M.D.
In October, 2011 the Exchange Board adopted a Statement of Vision, Mission and Values:
VISION: The vision of the California Health Benefit Exchange is to improve the health of all Californians by assuring their access to affordable, high quality care. MISSION: The mission of the California Health Benefit Exchange is to increase the number of insured Californians, improve health care quality, lower costs, and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value.
Click here for the official web site of the California Health Benefit Exchange.
Market-Rate Medical Insurance Plans Must Include “Essential Benefits”
The Federal PPACA mandates that only plans with “essential benefits” can be sold in the California Health Benefit Exchange (HBEX). In the HBEX comment letter to HHS, the California Exchange stated that “the essential benefit provision of the Affordable Care Act was intended to establish a meaningful and adequate minimum benefit standard to ensure basic coverage for consumers… to achieve the policy goal of a national benefit standard.”
According the HHS, all health plans sold in the HBEX must include these ten benefits:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management, and
- Pediatric services, including oral and vision care
Three of these items are currently either not included or included with limited benefits in existing (2013) California individual and small group plans: habilitative services (e.g., speech therapy for a child who is not talking at the expected age); mental health and substance use disorders (coverage must be consistent with the Federal Mental Health Parity and Addiction Equity Act); and dental and vision care for children (dental to include teeth cleaning, fillings, root canals and orthodontia, vision to include corrective lenses and frames).
In December 2012 Covered California (Exchange) released sample plan benefit summaries. Referred to as “Standardized Benefit Plan Designs, Summary of Benefits and Coverage” these samples show the type of benefits that health insurance companies must offer in 2014. These plan designs will likely be available in Covered California (Exchange) for individuals and small businesses.
The benefit descriptions include a “co-insurance” plan where a member would pay a percentage of a billed charge (e.g., 20% of the facility charge for a hospital stay) ; and, a “co-pay” plan where a member would pay a fixed dollar amount (e.g., $600 per day for.) It is not clear whether these plans are PPO or HMO. It may be that the same benefit applies to both PPO and HMO plans.
Health Insurance Plans Cost Sharing: Bronze, Silver, Gold and Platinum
Medical insurance plans available inside and outside of Covered California (Exchange) will have various deductibles, copayment levels and co-insurance percentages. These features are “cost sharing” which are distinct from the “types of services” or “essential benefits” (e.g., maternity, prescription medicine, etc.) included in a plan. California insurance regulators will evaluate.
The HBEX will offer four levels of cost sharing:
- Platinum (richest benefits);
- Gold (second richest benefits);
- Silver (third richest benefits); and
- Bronze (lowest benefit level).
An additional “Catestrophic” (high deductible) plan that was originally to be available only to people under age 30 and may now be available to everyone. An HHS Bulletin describes these benefit levels as “actuarial values” of the standard benefit plan. The intent is to standardize the benefits of plans and make it easier for consumers to compare one plan with another plan.
To keep up-to-date on the latest news related to the health exchange, Covered California and health insurance reform, subscribe to the BenefitsCafe Newsletter and be sure to check out our blog.
Covered California (Exchange) Announces a Few Individual Rates – HBEX released released the 2014 individual health plan rates for 25 and 40 year olds, and while these rates don’t look too high, there is much information that isn’t included.