Millions of uninsured Californians will soon be required to buy health insurance or face a penalty, and Wednesday morning they got a glimpse of what to expect.
Covered California, the organization responsible for implementing the federal health insurance overhaul, released a blueprint for what types of coverage will be available on the state's insurance marketplace. The Affordable Care Act requires state exchanges to be up and running by 2014.
Peter Lee, executive director of Covered California, said the exchange will add some much-needed standards and transparency to California's health insurance market.
"They are ready to play by the rules," Lee said of the insurance industry at a news conference. "They are ready to embrace the opportunity to compete not based on a shell game of hidden benefits but based on quality and value."
Federal rules sort available types of plans into four tiers that vary based on factors like cost and scope of coverage.
California goes beyond that requirement by ensuring a standard package that makes it easier to compare plans within a given tier, according to Anthony Wright, executive director of the organization Health Access California.
"Even in states without that extra step it's an improvement over current standards," Wright said. "But as opposed to apples and oranges, we're dealing with McIntoshes and Red Deliciouses."
Every plan available on the marketplace will guarantee a base line level of essential benefits that includes preventive care, prescription drug coverage, pediatric services and mental health treatment.
Insurers will be prohibited from denying coverage or imposing lifetime limits.
James Guest, president and CEO of the organization Consumers Union, said that consumers will benefit from being able to buy insurance without getting entangled in thickets of fine print.
"Not only can California consumers no longer be denied due to pre-existing conditions or other unreasonable restrictions, but now no surprises or gimmicks," Guest said via teleconference.
About 2.6 million Californians are expected to qualify for federal subsidies aimed at making insurance affordable for lower-income Americans.
Lee said he anticipates that an additional 2.7 million uninsured Californians who make too much to receive a subsidy will purchase insurance through Covered California.
The subsidies serve Californians in the middle of the income spectrum, who can get financial help to buy insurance but make too much to qualify for Medi-Cal.
"This is not a poverty program," Lee said, noting that a family of four making up to $94,000 can receive a subsidy.
Those getting subsidies will contribute a percentage of their income, with the government covering the rest. The amount varies based on income: a subsidized individual at the low end of the salary scale could have a monthly premium of between $26 and $78, while someone at the high end could be paying from $260 to $491.
Still unclear is how much Californians who make too much to qualify for a subsidy would pay. Covered California is seeking competitive bids for those plans, a process Lee said should be finished by June.
Medi-Cal – California's version of Medicaid – will also see big changes. The Affordable Care Act expands the number of Americans who can claim Medicaid, with the federal government set to cover much of the cost. Assembly Speaker John A. Pérez has predicted more than 1 million additional Californians will become eligible for Medi-Cal as a result.