SACRAMENTO (AP) — The state’s largest health insurers, including Anthem Blue Cross, Blue Shield and Kaiser Permanente, will be among 13 plans competing to provide coverage to millions of Californians through the state’s new health exchange, officials announced Thursday.
Covered California, the state agency running the health insurance marketplace, detailed plans and prices to be offered by private insurers when the exchange begins enrolling customers in October.
Coverage begins Jan. 1, the same time virtually everyone in the country will be required to have health insurance or pay a penalty.
The announcement marked the first time Californians got a clear picture of coverage offered under the new rules in President Barack Obama’s Affordable Care Act.
Geography will play a key role in determining premiums. Insurers must cover even the sickest patients and are restricted in how they can vary prices between customers.
For example, a 40-year-old San Francisco resident who earns more than $46,000 a year will be able to choose among five plans. Depending on how much coverage that person wants, he or she can pay a monthly premium of between $221 and $501.
A 40-year-old resident in Fresno who earns about $15,400 a year will be able to pick from four plans and will be eligible for federal subsidies. That person can expect to spend between $53 and $102 on premiums each month on a middle-of-the road health insurance plan.
Residents can go online to view what plans are being offered in their part of the state and figure out how much they will pay for health insurance depending on their household income and level of coverage they desire.
Peter Lee, executive director of Covered California, said the agency’s negotiating with health plans helped make insurance affordable in California.
“We want Goldilocks pricing,” Lee told reporters Thursday at a press conference. “We don’t want prices too high, but we also want to make sure there’s enough money so patients can get the care they need.”
Patrick Johnston, president and CEO of the California Association of Health Plans, said in a statement that doctors and hospitals have worked hard to ensure consumers have access to better health benefits and avoid financially crippling medical bills.
“Our mission is to ensure that all Californians have access to high quality health care at an affordable price,” said Paul Markovich, president and chief executive officer of Blue Shield of California, who joined Lee at the news conference. “Health reform, in short, is the right thing to do and California is doing it the right way.”
The goal of the exchange is to offer individuals and small businesses a choice of private insurance plans similar to the range already offered to workers at large companies.
The intent is to provide affordable plans with access to local doctors and hospitals, an annual cap on out-of-pocket expenses, and guaranteed coverage despite current medical conditions.
While low-income people will be referred to public safety-net programs, the federal government will offer subsidies to help some middle-income households pay their insurance premiums.
The cost of health care under the federal reforms already is emerging as a concern for middle-income people who do not get their insurance through an employer. Earlier this year, an actuarial report commissioned by Covered California found that middle-income residents could see individual health premiums increase by an average of 30 percent under the new law.
Health exchange officials say the new health insurance plans will be more comprehensive, making comparisons to current plans and premiums essentially meaningless. Lee said the rates offered in many plans turned out to be lower than the actuaries had estimated.
An estimated 5.3 million Californians will be able purchase insurance through Covered California. Of that, some 2.6 million will qualify for federal assistance.
People will be able to enroll through the website, but counselors also will be available at call centers to help them find a health plan or determine their eligibility for subsidies and tax credits.
The state is offering translation to Spanish and other languages to help people compare and choose a health plan that works best for their health needs and budget.
State officials said there was high interest from insurance companies because of the number of uninsured residents in California.
On average, there will be five plans to choose from in each region of the state. Rural areas will have two or three, according to Covered California.
The 13 plans include: Alameda Alliance for Health, Anthem Blue Cross of California, Blue Shield of California, Chinese Community Health Plan, Contra Costa Health Services, Health Net, Kaiser Permanente, L.A. Care Health Plan, Molina Healthcare, Sharp Health Plan, Valley Health Plan, Ventura County Health Care Plan and Western Health Advantage.
Officials running the state’s exchange divided California into 19 regions for rate-setting purposes. Aside from where a person lives, insurers are limited in their ability to charge consumers different prices for health care.
That is in part because California rejected an option under the federal law that allows companies to charge smokers up to 50 percent more for their premiums. Additionally, insurance companies are required to accept all applicants regardless of their medical histories and cannot charge older customers more than three times what younger customers pay.
California was one of the few states that required participating insurers to follow a uniform benefits structure so consumers would have an easier time choosing between plans.
Earlier this year, Covered California announced standard benefits that people can expect to receive under the Affordable Care Act. The state said the maximum out-of-pocket cost per year will be $6,350, which will help reduce the chance of personal bankruptcy.
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