The state's largest health insurers, including Anthem Blue Cross, Blue Shield and Kaiser Permanente, will be among 13 plans competing for policies from millions of Californians who are expected to purchase coverage through the state's new health exchange, officials announced Thursday.
Covered California, the state agency running the health insurance marketplace, announced the plans and prices that will be offered by private insurers when the exchange begins enrolling customers in October. Coverage begins Jan. 1, the same time virtually everyone in the country will be required to have health insurance or pay a penalty.
The announcement marks the first time Californians are getting a clear picture of the health plans and prices offered under the new health care rules in President Barack Obama's Affordable Care Act. Geography will play a key role in determining premiums because insurers must cover even the sickest patients and are restricted in how they can vary prices between customers.
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For example, a 40-year-old San Francisco resident who earns more than $46,000 a year will be able to choose among five plans. Depending on how much coverage that person wants, he or she can pay a monthly premium of between $221 and $501.
A 40-year-old resident in Fresno who earns about $15,400 a year will be able to pick from four plans and will be eligible for federal subsidies. That person can expect to pay between $53 and $102 on premiums each month on a middle-of-the road health insurance plan.
Residents can go online to www.coveredca.com to view what plans are being offered in their part of the state and figure out how much they will pay for health insurance depending on their household income and the level of coverage they desire.
Peter Lee, executive director of Covered California, said the agency's active negotiating with health plans helped make insurance affordable in California.
"This is a home run for consumers in every region of California," he said in a statement.
Patrick Johnston, president and CEO of the California Association of Health Plans, said health plans have worked hard to ensure consumers have access to better health benefits and avoid financially crippling medical bills.
"Anthem Blue Cross looks forward to the opportunity to serve the millions of Californians who will purchase health insurance through Covered California," said Darrel Ng, spokesman for the insurance company.
The goal of the exchange is to offer individuals and small businesses a choice of private insurance plans similar to what workers at large companies already receive. While low-income people will be referred to public safety-net programs, the federal government will offer subsidies to help some middle-income households pay their insurance premiums.
An estimated 5.3 million Californians will be able purchase insurance through Covered California. Of that, some 2.6 million will qualify for federal assistance.
People will be able to enroll through the website, but counselors also will be available at call centers to help them find a health plan or determine their eligibility for subsidies and tax credits.
The state is offering translation to Spanish and other languages to help people compare and choose a health plan that works best for their health needs and budget. Covered California announced recently that dozens of community groups have been awarded a total of $37 million in grants to help educate and reach out to residents.
State officials said there was high interest from insurance companies because of the number of uninsured residents in California. Some plans submitted bids to provide coverage statewide while others proposed to sell insurance only in certain regions of the state.
On average, there will be five plans to choose from in each region of the state, while rural areas will have two or three, according to Covered California.
The 13 plans include: Alameda Alliance for Health, Anthem Blue Cross of California, Blue Shield of California, Chinese Community Health Plan, Contra Costa Health Services, Health Net, Kaiser Permanente, L.A. Care Health Plan, Molina Healthcare, Sharp Health Plan, Valley Health Plan, Ventura County Health Care Plan and Western Health Advantage.
Officials running the state's exchange divided California into 19 regions for rate-setting purposes, meaning geography will play a key role in how rates vary throughout the state. Aside from where a person lives, insurers are limited in their ability to charge consumers different prices for health care.
That is in part because California rejected an option under the federal law that allows companies to charge smokers up to 50 percent more for their premiums. Additionally, insurance companies are required to accept all applicants regardless of their medical histories and cannot charge older customers more than three times what younger customers pay.
Under the federal law, insurers are required to offer comprehensive benefits such as emergency services and maternity care. California was one of the few states that required participating insurers to follow a uniform benefits structure so consumers would have an easier time choosing between plans.
Earlier this year, Covered California announced standard benefits that people can expect to receive under the Affordable Care Act. It was designed to help consumers comparison shop between insurance plans by letting them see their out-of-pocket costs on common medical services such as doctor's office visits, hospital stays and prescription drugs.
The state said the maximum out-of-pocket cost pea year will be $6,350, which will help reduce the chance of personal bankruptcy.