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California exchange promotes standard benefits

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The California Health Benefit Exchange board is standardizing the co-payment amounts, coinsurance percentages and other plan design features in all new individual and small-group health policies sold in the state.

The federal Patient Protection and Affordable Care Act of 2010 (PPACA) already requires all non-grandfathered, insured individual and small-group plans to cover the services included in a state’s standardized “essential health benefits” (EHB) package starting Jan. 1, 2014. 

If PPACA works as drafters expect, insurers will have to sell plans at four “metal levels” — bronze, silver, gold and platinum — based on the percentage of the actuarial value of the EHB package that the plan covers.

The California exchange board — which is calling itself “Covered California” — is going a step further and requiring use of standardized designs.

A chart summarizing the effects of the standardized design approach shows, for example, that a bronze plan could have a $5,000 deductible for medical care and drugs, a silver plan could have a $2,000 deductible, and a gold or platinum plan could not have any deductible.

The co-payment level for a primary care ofice visit could range $25 at a platinum plan to $60 per visit for three visits per year at a bronze plan.

The emergency room co-payment could range from $150 at a platinum plan to $250 per year at a bronze plan.

The maximum out-of-pocket expenses for one insured would range from $4,000 at a platinum plan to $6,400 at a bronze plan.

Some insurers have chronic condition management programs and value-based insurance design (VBID) programs that encourage patients to get care that seems to have a high probability of reducing overall plan costs by reducing or waiving cost-sharing amounts for patients who get that care.

Some VBID plans might, for example, charge a $5 co-payment or no co-payment for diabetes patients who get regular endocrinologist visits.

It was not immediately clear from Covered California standardized design materials how California will handle chronic condition management program care incentives.

It also was not immediately clear how the state will process the amendments to existing individual and small-group product forms needed to implement the new benefits design requirements.

The design standards program “will allow for innovation as health plans may propose alternative designs that benefit consumers and increase access,” officials said in a description of the standards.

Peter Lee, executive director of Covered California, said in a statement that the state will adjust the out-of-pocket costs for lower-income enrollees.

Standardization “lets consumers shop from one insurance provider to the next knowing that the benefits are the same,” Lee said. 

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