California’s health insurance exchange is a new program built from the foundation of the Affordable Care Act, also known as ObamaCare. The exchange offers a number of different health care plans for California residents that are unable to get insurance through an employer or government program. All plans that are listed on the exchange must meet specific coverage requirements as set forth by the Affordable Care Act, and adhere to certain pricing guidelines.
How the Health Benefit Exchange Works
The health insurance plans listed on the exchange are underwritten and administered by many of the same health care providers that individuals have been buying from for years. However, the plans sold through the exchange are highly regulated and must meet very specific criteria. One benefit to the added regulation is it will give individuals and families and easier way to compare “apples-to-apples” when shopping for insurance.
The organization that runs the exchange is called Covered California, and plans being sold break down into four main categories – bronze, silver, gold, and platinum. The fancier the metal associated with the category, the more the insurance plan will pay for health care costs. However, the better coverage comes with a higher monthly premium.
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In addition to the standard plans, individuals under the age of 30 and those that can prove a financial hardship may purchase what is called a “catastrophic” health care plan. This plan would come with the equivalent of a high deductible and would provide assistance only once medical bills reached a certain threshold. This plan would not cover routine doctor visits and typical care, but instead would provide a barrier from over-the-top medical costs after a major accident or health related incident.
Health Insurance Coverage
The Affordable Care Act mandates that all health insurance plans being sold for individuals and small groups have certain coverages starting in 2014. The aim is to provide more comprehensive insurance plans and make it easier for consumers to compare one plan to the next. These “Essential Health Benefits” include:
- Prescription drugs
- Hospital visits
- Laboratory tests
- Preventative medicine
- Maternity coverage
- Newborn care
- Mental health
California Health Exchange Eligibility
Any California resident who is unable to obtain “affordable” health insurance through an employer of separate government program is eligible to use the health benefit exchange. “Affordable” is defined as 9.5% of your household income, so even individuals and families receiving health care through an employee-sponsored program may still receive financial help through Covered California.
Eligible participants also include people with pre-existing conditions, since the Affordable Care Act forbids insurance companies from denying applicants based on them. Additionally, the premiums will be the same for individuals with pre-existing conditions as they are for people with no health conditions.
California Health Benefit Exchange Open Enrollment
The health care exchange will start taking signups October 1st for individuals and families looking to get coverage the following year. The open enrollment period will stay open through March 31st. It is important that any California resident looking to get health insurance through the exchange enrolls during that time frame, or risk not having appropriate coverage for the remainder of the following year. Individuals and families that lose their employer-sponsored health insurance outside of the open enrollment period will still be able to get coverage through the exchange, as long as they apply within 60 days of losing their previous policy.
Federal Tax Credits
As part of the Affordable Care Act, individuals and families making under a specified amount may be eligible for federal tax subsidies to assist paying for their health care. The credits are issued on a sliding scale, which means the less someone makes the more their tax credit could potentially be. The income range that may qualify for tax credits is 133% – 400% of the federal poverty level. That means a family of 4 making $92,000 may still qualify for tax subsidies.
The tax credits under the Affordable Care Act can also be applied to the monthly health care premiums throughout the year, rather than waiting until taxes are filed. That means that individuals and families can pay a smaller monthly payment all year long. Because of this benefit, people need to be very diligent when estimating their earnings for the upcoming year. If someone earns more than originally anticipated and ends up with a smaller subsidy, they will have to pay back anything the federal government has already issued.
Employer-Sponsored Plan Participants
Anyone who has an “affordable” plan through their employer will be able to keep their coverage. Affordable is defined as less than 9.5% of income. Anyone paying more than that for their employer-sponsored plan should contact Covered California, as they may be eligible for assistance with their premiums.
Covered California for Small Businesses
Small businesses with fewer than 50 employees are eligible to purchase health insurance through Covered California’s Small Business Health Options Program. Employers will be able to choose a plan level (bronze, silver, gold, or platinum) and can decide how much of the overall cost they want to pay and what the employee’s responsibility should be. These plans can also be extended to the employee’s family for an additional cost. Small businesses may also qualify for tax credits to help offset some of the health care expenses.