Insurance Market Reform

The ACA guarantees minimum benefits and affordability—but there’s more to do.

Before the Affordable Care Act (ACA), consumers were at the whim of insurers. Some were denied the opportunity to buy affordable insurance because of pre-existing conditions. Others were priced out of coverage because of age or health status—the ACA ends these practices and guarantees a minimum standard of benefits and affordability—but there is more to do to protect consumers in this market.

In pre-ACA days, each insurer had a different way of handling copays, coinsurance, deductibles, and drug coverage. Benefits varied depending on whether the coverage was regulated by the Department of Managed Health Care, which required coverage of all medically necessary care (except prescription drugs) or by the Department of Insurance because the insurance code characterized as “health insurance” coverage that included limited hospital stays, one or two doctor visits, and five or ten generic drugs.

California’s implementation of the ACA has changed all of that. The same “essential health benefits” apply no matter which law regulates coverage—and the “essential health benefits” for everyone in the individual or small employer market include all medically necessary care (doctor visits, inpatient hospital care, maternity care, prescription drugs and other basic health care).

Covered California is the new marketplace for individual consumers and small employers to purchase coverage—and the only place many individuals and small employers can obtain tax subsidies to help with affordability. Individual consumers who do not get coverage through their employer or through public programs such as Medicare and Medi-Cal are eligible for subsidies through Covered California depending on income. Covered California also negotiates for the best possible rate, and has standardized benefits, including copays, deductibles and other cost sharing so that consumers can make easy “apples to apples” comparison. Today more than 1.4 million Californians have purchased standard benefits either through Covered California or directly from a health plan.

Different health plans contract with different, though sometimes overlapping networks of providers. Some health plans use different networks for Medi-Cal than for employer coverage and yet again different networks for individual coverage than for other coverage.  Continuing decades of advocacy, Health Access has fought for better oversight of network adequacy and timely access that accounts for these differences.  Networks need to be adequate, whether narrow or broad. No network contains every type of provider for every need so plans must have mechanisms for providing access to medically necessary care at in-network cost sharing, even if the consumer is referred out of network by the plan.  Every consumer should get the care they need when they need it.

Health Access promotes regulatory tactics and transparency in order to help consumers make wise and informed decisions about their health  coverage. Further, Health Access supports ways to grow the group insurance markets, which are better able to spread risk across a wider pool and bring down the cost of coverage.  We are pleased that Covered California is attempting to function as a group purchaser on behalf of those California consumers who buy coverage as individuals.

Timeline: History of Health Reform in California (1985 – 2016)

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Health Access Analysis (2013-2015)

Health Access (2012 and earlier)