Covered California, the state marketplace for individuals, families, and small businesses buying health coverage, and a core component of implementing the Affordable Care Act, announced the health plan options and premiums that will be offered next year, starting in January 1, 2014. Covered California is one of the only exchanges in the country that took advantage of the opportunity to employ “active purchasing” – using its purchasing power to negotiate with insurance companies for plans on behalf of California consumers.
The good news for consumers was that California’s major insurers are participating (13 plans statewide, 3-6 options in each region) and offering competitive premiums, in this new marketplace with better benefits and new consumer protections. The scaremongers and opponents who raised fears of “rate shock” were wrong–the premiums were significantly lower than projected by Milliman and others. Health insurance isn’t cheap, but these premiums are competitive, with dramatic drops in premiums for some, and the increases for others in line with standard rate hikes in previous years, and/or an acknowledgement of the improved benefits in the product.
The coverage reflected this positive development from coast to coast, in articles in The New York Times, in Reuters, in the Los Angeles Times, in the Sacramento Business Journal, and in The New Republic.
For too long, individuals buying coverage themselves were left all alone at the mercy of the big insurers. Covered California offers a dramatic departure from the current complex, confusing, and costly market. Instead, Covered California will offer choice, competitive premiums, and easy comprehensible comparisons.
Californians should be proud that not only were we the first state in the nation to set up a new insurance marketplace under the ACA, but that we are one of the few that negotiates with the insurer for the best value. On behalf of individual consumers and families, Covered California was able to get a similar deal as large employers. Quality health coverage isn’t cheap, but Covered California helps get the group discount for the rest of us.
Beyond the listed premiums, most consumers buying coverage in the individual market will get financial help and see their premiums go down. It’s a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale.