Limits Out-of-Pocket Expenses
In accordance with the ACA, SB639 limits the expenses that individuals have to pay out-of-pocket for all covered benefits – this includes co-pays, co-insurance, and deductibles. As per the ACA, the limit would be $6,050 for individuals and approximately $13,000 per family per year. Senator Hernandez, the bill’s author explained that this effectively ends medical bankruptcy, as Californians will no longer face medical bills of tens or hundreds of thousands of dollars.
Categorizes Plans By Actuarial Value
In accordance with ACA, SB639 categorizes health plans into 4 tiers: Platinum, Gold, Silver, and Bronze, based on the average percentage of health care costs the plan covers. An individual who purchases a Platinum plan can expect that the plan will cover approximately 90% of their health care costs, and someone who purchases a Bronze plan can expect approximately 60% of costs to be covered (Bronze plans will likely have lower premiums).
Covered California, the state’s health insurance marketplace, will only be selling plans with a standard benefit design – allowing consumers to make “apples to apples” comparisons between plans so they can get a better understanding of what they are getting for their premium dollar. SB639 requires that plans sold on the individual market outside of Covered California will also adhere to the standardized benefit design.
SB639 is an important measure that will require insurance companies to compete for customers based on quality and price rather than trying to make profits by avoiding sick people; it also makes important strides toward making health care affordable for all Californians. The bill passed on a party line vote (with Senator Pavely absent) and moves on to Senate Appropriations.