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 you?
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)
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.
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.
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 and
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