California Health Insurance Exchange 101

With the inception of health care reform, we have seen numerous changes in health care, such as full coverage of preventive care services and work has already begun to create state-based “exchange” around the country. But, how can you use one of these exchanges? How can it help consumers looking for affordable health care coverage in California?

An exchange is a marketplace where individuals and small business firms can shop and compare different California health plans online. Plans will be standardized; every plan sold by insurance companies will offer the same benefits to make it easier for consumers to shop for health coverage. Consumers will simply focus on the cost and quality of the health plan when doing comparison shopping. It’s designed to make it easier than the complicated fine print we now should read, but can’t always understand.

Why Would A California Health Insurance Exchange Be Controversial?

Like almost everything else, state-based exchanges are enmeshed in politics. In California and other states, lawmakers have agreed to adopt the legislation in setting up exchanges, but many Republican governors are fighting the exchanges. Some governors even refuse to implement any part of the health care reform, such as in Florida.

California, Florida and Texas contribute 40 percent of the 4.3 million uninsured children in the country and lack of coverage hurts the adults in these states, as well. The insurance exchange can give the public a better chance to get affordable health plans. However, some insurance experts predict that healthy individuals will opt out from the exchanges if they are not well planned. That would leave insurance companies insuring sicker people, which typically drives up CA plan premiums.

When Will The California Health Insurance Exchange Be Ready?

The new health insurance marketplace is required to be fully functional on January 1, 2014. By that date, all states are expected to have set up their state-based exchange. If they fail to do so, the federal government will run an exchange for that state.

The CA exchange will initially be open only for individuals buying their own health coverage and for small businesses looking for plans to cover employees. Most U.S. citizens will still get health coverage through their jobs, but there are millions of people who don’t have that choice. For better or worse, immigrants without documents will be barred from buying health insurance through the exchanges. Since many illegal immigrants work in food production in the U.S., keeping them healthy sounds like it would be extremely important.

Congressional members and staff will be required to buy health plans for California through the exchange, but other federal employees can get health care coverage outside the exchange. Among the public, 11.5 million U.S. citizens are expected to use the exchanges in 2014, and the Congressional Budget Office estimates that will double in 2018.

How Much Will California Health Insurance Plans Cost?

Since there are four different types of plan offered, premiums will vary depending on the level of benefits and your location. There will be a choice of bronze, silver, gold and platinum plans, and all plans will incorporate certain safeguards. For example, insurance companies will not allowed to charge premiums based on your gender or your health status. However, insurers may increase rates based on age. Seniors could be charged triple the rate for young adults.

The Obama administration has said there will be a set of “essential benefits” in every health plan sold through the exchange. The benefits are still being worked out, but will definitely include coverage for services such as emergency care, prescription drugs, hospital care, lab services, maternity care and pediatric care.