This is the first part of a two-piece delivery from the State of California in terms of what to expect for the much anticipated (for us, at least) California health insurance plan options available Jan 1st. The State just released the final versions of the plans available to California residents for both individual and small group markets. Keep in mind that these are the proposed Exchange plans and there may be differences (especially in networks) between in and out of Exchange health plans which will discuss, but let\’s take a look at what we can expect. You can access the benefit summary here.

Finally, a look at the California Platinum health plans

First, a few pointers to reading the plan benefits since there are a few layers of complexity on top of just standard benefits. We\’ll provide guidance based on what we know now which will definitely change going forward. There are 4 basic plan types and one catastrophic plan for younger people under age 30. The four basic plans are Platinum, Gold, Silver, and Bronze in decreasing benefit and cost. If you see a \”SHOP\” at the top of the benefit matrix, that means the plan is available for group health insurance in California. If you see \”Individual\”, that means it is available for Individuals and Family (as opposed to group health coverage). If you see neither, we infer that these are available to both group and individual but we\’re awaiting clarification.

Breakdown of California health plan benefits

The State decided to offer a coinsurance and copay plan design for each metallic option. For example, there is a Platinum Coinsurance plan and a Platinum Copay plan. Basically, the difference is what happens when you have bigger bills (think diagnostic lab, hospital, etc). The coinsurance plan will require you to pay percentage (10% for the platinum for hospital as an example) while the Copay plan will require you to pay a fixed amount ($250 per day up to 5 days). It\’s hard to know which is better as it depends on your medical costs but the Copay version is usually more beneficial for many situations. The benefits are pretty rich and the numbers reflect your (the member\’s) out of pocket costs. The real numbers to look at are the deductible, out-of-pocket limit, and RX coverage as these drive cost differences the most.

The effects of Subsidies on the California Exchange plans

As you go through the plan options, you\’ll notice about half way through that you see \”100%-150% FPL\” in the title of one of the Silver plans. This refers to changes in benefits which are affected by your income level. The 100%-150% means that you make between 100% and 150% of the Federal Poverty Levels. Due to this income level, you will get richer benefits than someone making 150%-200%, 200-250% of poverty. This is in addition to subsidies that you will receive up to 400% towards the monthly health insurance premium. The subsidy qualified health plans are very rich by today\’s standard. We haven\’t seen plans like those in 10 years and it will be interesting to see what the rates are which we should have around summertime.

What to expect with the new Health Exchange plans

A few important considerations. We still have HSA options which is great news. The benefits are very very rich on everything but the Bronze plan which means that the vast majority of those without a subsidy will stay with a grandfathered plan or choose the Bronze. In the Exchange, the Silver and Bronze will likely reign due to cost considerations and the fact that no carrier wants to offer the best Platinum plan on the market (adverse selection). Even with subsidies, the rates will be so high on the richer plans that many people may move down in benefits as well. Keep in mind that you have to make very little to qualify for a subsidy at 100-150% so cost is still the main concern even if subsidized. You\’ll also noticed that there isn\’t a subsidized plan for Platinum, Gold, or Bronze.