Covered California, the organization responsible for implementing the federal health insurance overhaul, released a blueprint for what types of coverage will be available on the state's insurance exchange. The federal Affordable Care Act requires state exchanges to be up and running by 2014.
Peter Lee, executive director of Covered California, said the government-regulated exchange will add some much-needed standards and transparency to California's health insurance market.
"They are ready to play by the rules," Lee said of the insurance industry at a news conference at his organization's downtown Sacramento headquarters. "They are ready to embrace the opportunity to compete not based on a shell game of hidden benefits but based on quality and value."
There will be four plans available: platinum, gold, silver and bronze. The premium would cover 90 percent of the cost under the platinum plan, with copays making up the other 10 percent. Under the bronze plan, the premium would cover 60 percent, and copays would account for the other 40 percent.
Deductibles for specific services and the amount consumers would have to pay for different medical events, from lab tests to emergency room transportation, vary from plan to plan, as would maximum out-of-pocket costs.
Every plan available on the marketplace will guarantee a baseline level of essential benefits that includes preventative care, prescription drug coverage, pediatric services and mental health treatment. Insurers will be prohibited from denying coverage or imposing lifetime limits.
James Guest, president and CEO of the organization Consumers Union, said that consumers will benefit from being able to comparison shop between different plans that include a minimum standard of coverage.
"Not only can California consumers no longer be denied due to preexisting conditions or other unreasonable restrictions, but now no surprises or gimmicks," Guest said via teleconference. "Benefits are going to be exactly the same from one carrier to the next."
About 2.6 million Californians are expected to qualify for federal subsidies aimed at making insurance affordable for lower-income Americans. Lee said he anticipates that an additional 2.7 million Californians who do not already have health insurance, but who make too much to receive a subsidy, will purchase insurance through Covered California.
Because the Affordable Care Act sets costs for subsidy-eligible Americans based on a percentage of their income, Wednesday's announcement included how much lower-income Californians will pay under four available plans.
"We can state with certainty what insurance will cost for low-income Californians," Lee said.
Still unclear is how much Californians who make too much to qualify for a subsidy would pay. Covered California is soliciting competitive bids for those plans from insurance companies, a process Lee said should be finished by June.
The subsidies apply to Californians who fall in the middle of the income spectrum: They can still get financial help to buy insurance on an exchange but make too much to qualify for Medi-Cal. Lee noted that a family of four can make up to $94,000 and still receive a subsidy.
"This is not a poverty program," he said.
Medi-Cal -- California's version of Medicaid -- will also see some big changes, although speakers at the news conference didn't address that. The Affordable Care Act expands the number of Americans who can claim Medicaid, and the federal government is committed to covering much of the cost. Lawmakers in Sacramento will be considering proposals in a special legislative session on health. Assembly Speaker John A. Pérez has predicted more than 1 million additional Californians will become eligible for Medi-Cal as a result.
PHOTO CREDIT: Covered California's executive director Peter Lee offers some details about insurance plans that will be available to Californians, Feb. 13, 2013. Jeremy B. White / Sacramento Bee.