California exchange to include 13 health plans

As many as 5 million Californians next year will be able to shop for insurance from 13 health insurance plans, officials at Covered California, the state agency tasked with setting up its exchange, said Thursday.

Those plans are a combination of large commercial insurers and smaller regional plans. The state’s biggest carriers — Kaiser Permanente, Anthem Blue Cross of California, Blue Shield of California and Health Net Inc. — are participating, while some of the nation’s biggest carriers — UnitedHealth, Aetna and Cigna — are sitting out the Golden State altogether.

The other health plans include Alameda Alliance for Health, Chinese Community Health Plan, Contra Costa Health Services, L.A. Care Health Plan, Molina Healthcare, Sharp Health Plan, Valley Health Plan, Ventura County Health Care Plan and Western Health Advantage.

The exchange also released some sample rates, and they varied widely between plans.

The rates submitted to Covered California for the 2014 individual market ranged from 2 percent above to 29 percent below the 2013 average premium for small employer plans in the state’s most populous regions, officials said.

The average plan will carry a monthly premium of $300. But officials also noted that most people will receive a subsidy to help cover part of that cost.

“This is a home run for consumers in every region of California,” Peter Lee, executive director of Covered California, said in a statement. “Our active negotiating will not only benefit potential enrollees to Covered California, but will benefit all Californians by making health care affordable.”

Though Covered California said that selected plans and premiums remain subject to review by state regulators, Consumer Watchdog said that neither regulators nor exchange officials have the power to require an insurer to reduce or deny a proposed rate that is unreasonable.

Without rate regulation and an exchange dominated by the biggest insurers in the state, the nonprofit organization argued that consumers might be hit with higher premiums than California officials are letting on.  

"When smaller companies step aside the Big Three insurers [Kaiser Permanente, Anthem Blue Cross of California, Blue Shield of California] gain even more power over prices in the health insurance market," Consumer Watchdog President Jamie Court said. "There needs to be a check and balance on the three health insurance companies that control 80 percent of the market and that is requiring that their premium hikes be justified."

Meanwhile, groups such as Consumers Union, the policy and advocacy division of Consumer Reports, praised Covered California's release of rates and plans as an "important milestone for implementing the Affordable Care Act" while arguing it will help consumers save money.

"Covered California will make it dramatically easier for consumers to compare plans and make smart choices that fit their budget," Betsy Imholz, Consumer Union's special projects director said. "[The exchange] is bringing health and financial security to our families."

Many across the country have been eyeing what transpires on California’s exchange, on the expectation that other states might follow suit. Enrollment in the exchanges is set to begin Oct. 1, with coverage beginning in January 2014.

Analysts and industry insiders have warned consumers will face premium “rate shock” under PPACA, but California’s rates were for the most part less expensive than expected.

On average, people in the larger metro areas of California will be able to choose from among five different plans. Covered California officials said that even in rural areas where options have typically been sparse, people will have two or three health plans to choose from.

The agency said it will announce its options for small businesses to buy health insurance next month.

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