Reform in California
Jan 1st 2014 Transition
January 1st, 2014 - H Day
Most Individual and Family members will have to switch to new plans Jan
A new set of Metallic plans will start Jan 1st (detail below)
Coverage will be guaranteed issue and subsidies/penalties will begin Jan
1st (detail below)
Jan 1st 2014 Health Plans
(available October 1st and after)
We tried to be catchy in naming the big date on
the horizon for Health Reform but it's marginal at best. The name may be
lacking but the importance of that date, Jan 1st, 2014 is anything but as it
will bring about significant changes to California health insurance for most
State residents. Let's take a look at this day to determine its effect on you,
your family, and your company.
Jan 1st is when the Health Exchanges really come
online for the California health market. People can start to submit
applications October 1st, 2013 but the earliest available effective date will be
1/1/2014. Anyone on an existing, non-grandfathered plan will also be moved
automatically to one of the new Exchange plans or they may have an option to
change plans at this time but 1/1/2014 is still the date for this change.
Health reform established an open enrollment window of 6 months for the first
roll out (from October 1st, 2013 through March 31st, 2014) and then a 3 month
window for each year after (most likely the last three months of the year but
yet to be announced as of this date). So what does all this really mean for
New health plans, new rates, new rules.
Just about everything is changing 1/1/2014.
There will be four new plans (platinum, gold, silver, and bronze) available from
any participating California health insurance carrier. They will all have these
levels but offer different takes or versions of each. For the individual family
market, expect the benefits to be quite a bit richer than what most people
actually purchase on the market today. Of course, this means that the pricing
will also be quite a bit higher than what most people are paying today. We
expect rates to increase 30-50% immediately on that date for equivalent plans to
what people have now. Keep in mind that most people who purchase their own
California health coverage are on higher deductibles to keep the price as low as
possible. These plans are much less expensive than the plans that will be
allowed on the Exchange. This is probably the biggest issue we see unless you
qualify for subsidies by making less than
400% of the federal Poverty level.
Another main driver of the increase will be guaranteed issue coverage where
someone cannot be declined due to health. You will likely be locked into the
plan you choose for 12 months (until the next open window)
Small group market will see less effect
The California insurance market for small
companies will see big changes in plan options (the same four as mention) and
rules but will hopefully not see as big an increase as the individual and family
market. The rules will be quite different in that the employer will establish a
certain benefit level (the four metallic health plans mentioned above) and the
employee can then choose that plan from any carrier through the SHOP exchange.
This is very different and we're still curious as to how this will work. No
carrier will want to have the richest Platinum, Gold, or Silver plan available
since they might "attract" higher risk. This is a pressure the individual
market has long seen but new to group health.
Other changes in the marketplace Jan 1st,
Aside from health insurance being available
regardless of health, there are other big structural changes. Penalties for not
purchasing individual coverage will begin while subsidies based on income will
also go into effect. It's hard to see the benefit of Cobra, HIPAA, PCIP, and
other band-aid continuation of coverage programs although Medi-Cal will have an
expanded role. HSA's are expected to continue with an eligible plan available.
New taxes are actually expected to start in 2013 with continuation and ramp-up
in 2014 and out. Ultimately, the key to this transition is staying informed
calhealth.net is solely focused on helping you with this task.
Watch our California Health Reform and Me
video (above) to see how Reform might affect you.