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California officials unveil exchange plan menu

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Managers of the new Covered California individual health insurance exchange program today unveiled preliminary plan menus that might be shorter than some had hoped.

The exchange will be offering slots to a total of 13 carriers statewide, but the number of carriers available in an given community will range from a high of six in some areas to as few as three in others, officials said.

Mid-level “silver plan” coverage could cost less than $250 per month for a 40-year-old male in some markets, but the average premium rate for the cheapest silver-level plan in a market will be about $300 per month, and the rate for the third cheapest silver plan will be $335, according to a guide to the exchange menu plan rates and a related Covered California presentation.

Paul Markovich, president of Blue Shield of California, estimated that 2014 rates for individual coverage sold through the exchange will cost about 8 percent more than comparable individual coverage sold through the traditional individual market this year.

Once the effects of new Patient Protection and Affordable Care Act (PPACA) fees and benefits mandates are included, the average increase in  total cost will be about 13 percent, Markovich said.

Covered California rates

The California Health Benefit Exchange, the agency that runs Covered California, will announce the results of the state’s Small Business Health Options Program (SHOP) small-group exchange plan selection process in early June, officials said.

The following carriers are on track to sell individual coverage through Covered California in at least some California communities:

  • Alameda Alliance for Health.
  • L.A. Care Health Plan.
  • Anthem Blue Cross of California.
  • Molina Healthcare.
  • Blue Shield of California.
  • Sharp HealthCare.
  • Chinese Community Health Plan.
  • Valley Health Plan.
  • Contra Costa Health Services.
  • Ventura County Health Care Plan.
  • Health Net.
  • Western Health Advantage.
  • Kaiser Permanente.

Anthem Blue Cross is a unit of WellPoint Inc. (NYSE:WLP).

The list does not include Aetna Inc. (NYSE:AET), Cigna Corp. (NYSE:CI), Humana Inc. (NYSE:HUM) or UnitedHealth Group Inc. (NYSE:UNH).

Peter Lee, the executive director of Covered California, said some carriers dropped out of the exchange “qualified health plan” (QHP) application process because they did not want to make as much of an effort as Covered California wanted to improve health care and health coverage access.

Covered California excluded other carriers because their rates were too high, Lee said.

Overall, “we have a great, competitive market for the consumer,” Lee said.

Lee, Markovich and others appeared at a press conference that the California Health Benefit Exchange, held to unveil the results of the individual exchange QHP selection process.

When reporters at a press conference asked Lee about the lack of several major carriers from the plan menu, Lee avoided talking about specific carrier choices.

“We are thrilled with the amount of competition that we have, with the plans that we have on the shelf,” Lee said.

The carriers on the menu all have deep histories in the region, and some, such as Chinese Community Health Plan, serve specific niche markets, Lee said.

PPACA calls for all exchange plans to cover set percentages of the actuarial value of a standard “essential health benefits” (EHB), with “bronze level” plans covering about 60 percent of the value of the EHB package. The value coverage levels are supposed to be about 70 percent for silver plans, 80 percent for gold plans and 90 percent for platinum plans.

California will require plans at each level of coverage to use a standardized set of plan design features.  

In some markets, Lee said, rates will be low enough that residents with incomes from 300 percent to 400 percent of the federal poverty level may not qualify for PPACA health insurance subsidies because, by PPACA standards, the coverage will be affordable even for people with modest incomes.

Lee said he thinks consumers will be happy to pay for the coverage.

“What we hear again and again is that Californians want to protect their families,” Lee said.

Californians also want to have assurances that the coverage they do buy will work when they get sick, Lee said.

PPACA calls for the U.S. Department of Health and Human Services (HHS) or state agencies to make exchanges, or health insurance supermarkets, available in all 50 states and the District of Columbia by Oct. 1, with QHP coverage starting to take effect Jan. 1, 2014.

The webcast of the press conference suggested that the PPACA exchange program remains mysterious even to many of the reporters trying to cover the exchange program.

The California Health Benefit Exchange board has been talking about marketing efforts for years, posting many marketing plans on its website, and hiring marketing and advertising companies, but one reporter asked Lee whether the exchange would be trying to actively market Covered California.

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