California health exchange reveals premium costs

by Jim Sanders , Sacramento Bee

Californians received the bottom line Thursday on which insurance firms will sell policies on the state’s new health-care exchange this fall and how much those premiums will cost.

The announcement by Covered California, the marketplace for such policies, brings into sharper focus the impact of the nation’s health-care overhaul on families and their pocketbooks.

Thirteen health plans were picked to submit plans, with none of the state’s 19 designated regions having fewer than three plans to serve consumers, Covered California announced.

Anthem Blue Cross, Blue Shield of California, Health Net and Kaiser Permanente were among the firms chosen. Their tentative selection is subject to rate review by state regulators.

California’s 19 geographic regions will average five health plans from which to choose. Even in most rural areas, consumers will have two or three options – though in a small number of counties only one plan will be available, officials said.

"Californians should be proud of how not only health plans in this state, but doctors, medical groups and hospitals have stepped up – creating a market that will allow millions of consumers to enroll in affordably priced products," Peter V. Lee, director of Covered California, said in a written statement.

"Because of that, we will be able to deliver exceptional value, low rates, access to health care in every region of the state, and a solid platform to achieve the dream of providinig quality health care for all Californians," Lee added.

Premiums will vary based on age, region, household size and type of coverage sought.

Requirements of Covered California’s insurance policies differ from those sold in the state’s individual market currently, without public subsidies, so price comparisons are not readily available.

Covered California contends that the most valid cost comparison is with health-care policies currently sold in the state’s small employer market. The exchange’s policies next year would range from 2 percent above to 29 percent below this year’s averages for the existing small employer market in California’s most populous markets.

In the capital region, encompassing Sacramento, Placer, Yolo and El Dorado counties, consumers buying through the exchange will be able to choose policies from Blue Shield, Kaiser Permanente, Western Health Advantage — and two forms of Anthem coverage.

For a relatively basic policy, known as a "silver" plan, the total monthly premium in the Sacramento region for a 40-year-old single individual would range from $332 to $476, with federal subsidies on a sliding scale for people with incomes up to $45,960. Individuals eligible for the highest subsidy, $276 per month, would face out-of-pocket expenses of $56 for monthly premiums.

Under next year’s controversial national health-care mandate, often called Obamacare, nearly all Americans will be required to have health insurance next year or pay a fine of $95 or 1 percent of their annual income, whichever is more.

Californians of low and moderate incomes who buy policies on the state’s new exchange will receive federal subsidies on a sliding scale, extending to a family of four earning up to $94,200.

An estimated 2.6 million Californians will be eligible for subsidies if they buy through the exchange.

Four tiers of policies will be sold by Covered California: bronze, silver, gold and platinum. The lowest premiums are for policies with the highest out-of-pocket costs for care – and vice versa.

Californians cannot be denied coverage based on pre-existing medical conditions, prices cannot vary by gender, and insurers are not allowed to set a maximum dollar amount they will pay during a policyholder’s lifetime.

All policies sold by the exchange must cover preventive care, prescription drugs, contraception, medical screenings – such as mammograms – and other "essential benefits," including pediatric, mental health, maternity and rehabilitation services.

Covered California is scheduled to begin selling policies in October for coverage that takes effect Jan. 1.