California health insurance  -  Health insurance options in California  -  Closed health plans in California

What happens when a California carrier closes a health plan?

The timing of this question couldn't be more pertinent than now has we have lost dozens of health plans in the last 18 months with more to come.  Even more importantly is the fact that almost all current plans on the California health insurance market will disappear Jan 1st 2014 when Health Reform kicks up in earnest.  It's important to look at what happens when a health plan is "closed" because odds are, it will happen to you.  Let's jump right in...what if you get the letter that your plan is being closed.

First, there are two different scenarios prior to Jan 1st 2014 for plan closures. 

In some cases, Carriers will close a plan to new enrollees but allow existing members to stay on the plan if they choose to.  In other cases, they close the plan altogether to both new and existing enrollees.  Why are plans closed in the first place and what options do we have if we're an existing member.  Occasionally, health plans are closed just because they are not attractive to the market which means that they do not have enough members to provide a big enough risk pool.  This means that a few really big claims (say $500K plus) can doom the plan or has already.  On the other hand, we've seen plans that are too popular which means that the pricing was to low to support the resulting claims.  There's a great deal of pressure these days both publicly and at the State legislative level to contain rate increases.  If a health plan's claims genuinely require a 25% rate increase to stay viable but the State will push back (not to mention bad press in the papers) against anything over 10%, the plan has a problem.  Rather than be the bad guy on the increase side, the carrier may just close the plan altogether.  We've seen few of these lately.  So what happens to existing members?

What Happens to Existing Members?

Existing members are always given an opportunity to move a similar plan (might be up or down in benefits/cost depending on where the prior plan was positioned) guaranteed issue which means regardless of health and with no change in tier.  Tiers are increases in rates based on health at the time of original underwriting.  If the member is in good health, there's nothing preventing them from running an instant California health quote to see what's available on the market.  The plans and rates have changed quite a bit over the last years so it's not a bad idea to see what's out there.  This brings up a good time to introduce the "Grandfathered" plans.

Grandfathered plans refers to plans with an effective date prior to 3/23/2010.  If you're plan was effective before that date and you haven't made changes, you have a special classification.  These plans are essentially closed since no new enrollee can join them.  In a normal market, closing a plan usually is the death knell of that plan eventually.  This is how it  happens.  There will inevitably be a rate increase.  Healthy people will check out the market and find better priced, newer plans.  Unhealthy people will be unable to move due to health.  The risk pool gets more and more risky which drives further rate increases and the cycle accelerates.  The Grandfathered plans are different however.  They do not have many of the health reform mandates so they have remained less expensive than the newer plans for comparable benefits.  When we have run quotes against Grandfathered plans, it's hard to beat their pricing.

Now, the Big Closing coming Jan 1st, 2014.  All plans aside Grandfathered plans will essentially be closed Jan 1st 2014 and then we'll have plans available...Platinum, Gold, Silver, and Bronze.  At that point, it will make sense to re-analyze the options and we're more than happy to help you with this process.

 

You can run your California Plan Quote here to view rates and plans side by side from the major carriers...Free.

Again, there is absolutely no cost to you for our services.  Call 800-320-6269 Today!

 

 


 

 


ABOUT SSL CERTIFICATES

Covered Ca tax credits
Call 800-320-6269
Our Services are FREE to You!

Call to Enroll over the Phone in 15 Minutes

Enroll Covered Ca quickly online

Call 800-320-6269

Anthem Blue Cross California
Blue Shield of California under Covered California
Kaiser of California
Health Net of California
Aetna
and more
Thousands of Californians
Hundreds of California Companies
SUCCESSFULLY
ENROLLED
Thousands of Californians
Hundreds of California Companies

from SC

"My sincere thanks for making a miracle happen- 2014 health insurance !! Many thanks for your expertise and advice yesterday !!"

from SD

"Thanks again for your help - I had absolutely no idea how to get this done when I got up this morning. You've made it remarkably easier than I expected. I hope you're not stuck at the office all night..."

from KV

"Anyway, I hope you got some time off this past week! Thank you again for your help and efforts on my behalf! I was very lucky to find you."

from EK

"I thank you very much for the time that you have invested in handling everything

from SR

"I truly appreciate the quick response and will think of you in the future if I need to make any changes to my insurance plans."

from VH

"You are awesome... takes a huge worry off my back, thank you for your kind. thanks for your time and kindness. !!"

from SA

"Wow, I can't thank you guys enough for your help...I couldn't imagine trying to tackle this on my own!"

from LM

"You are my new best friend. A HUGE thank you again.

SUCCESSFULLY
ENROLLED
Find out what customers are saying about our services
About Calhealth.net

20 years of experience in the California health insurance market has taught us one thing...Competent and experienced guidance is Invaluable

We can quickly (very important) size up your health insurance needs and clearly explain the options available to you. Our focus is finding the most coverage at the best cost to you.

We are licensed Covered Ca agents with in-depth knowledge of their plans, process, and tax credits.

Call us...you will be Pleasantly Surprised.  800-320-6269

Request a 10 Minute Health Plan Check-up

We'll quickly see if you have the best priced plan available and if you qualify for a tax credit

800-320-6269
calhealth website

Our Services are FREE to You

Calhealth.net is a Goodacre Insurance Services Website

This website is owned and operated by Goodacre Insurance Services, which is solely responsible for its content. This site is not maintained by or associated with Covered California, and Covered California bears no responsibility for its content. The email address and phone numbers that appear throughout the site belong to Goodacre Insurance Services, and cannot be used to contact Covered California.