California Health Benefits Exchange
The Affordable Care Act (ACA) simplifies the process of identifying, comparing and purchasing accessible and affordable health insurance coverage by creating a marketplace called an Exchange. In California, it will be called the California Health Benefits Exchange (Exchange). Individuals and families, as well as employers with fewer than 100 employees, will be able to purchase insurance through the Exchange. Premium assistance for those who meet specific financial eligibility requirements will also be available through the Exchange. The Kaiser Family Foundation has developed an easy guide about accessing health insurance beginning in 2014 called How People Get Health Coverage Under the Affordable Care Act Beginning in 2014. This section addresses details about the Exchange from the viewpoint of individuals and families.
At a Glance
At a Glance
When fully implemented in 2014, the California Health Benefits Exchange will serve as a “one-stop” shop to find and compare affordable, quality health insurance options. Benefits to those eligible to enroll include:
- Lower Costs: The Exchange creates a large pool of enrollees. Risk and costs will be lower because large numbers of healthy individuals will offset the expense of the few who may be seriously injured or sick during any year.
- One-Stop Shopping: The Exchange will make purchasing health insurance easier by providing eligible consumers with tools to compare benefits, pricing and quality, as well as access to both private and public coverage options.
- Greater Benefits and Protections: The Exchange will create a health insurance marketplace that will allow employers and consumers to choose from plans offering minimum essential benefit options. Individuals and families purchasing health insurance through the Exchange may also qualify for premium assistance depending upon their income.[i]
Click on the following for more information:
- What is a Health Benefit Exchange?
- Who is Eligible to Enroll in the Exchange?
- How does an Exchange make Insurance more Affordable?
- What Health Plans will be Offered through the Exchange?
- How will I Choose a Plan?
- What is California Doing Now?
- Additional Resources
What is the Exchange and Who is Eligible?
A Health Benefit Exchange is a transparent and competitive insurance marketplace where individuals and families can buy affordable health benefit plans. Starting in 2014, Members of Congress will also get their healthcare insurance through the same Exchange offered to their constituents.[ii]
Individuals must meet federal requirements (the applicant is lawfully in the United States; not incarcerated; a resident of the exchange service area; not eligible for other forms of government or employment-based coverage) in order to purchase coverage through the exchange.[iii]
How will the Exchange work?
The Exchange makes insurance premiums more affordable by increasing marketplace competition and by offering Federal tax credits for income-eligible applicants.
Competition is increased because the Exchange creates a large risk pool of prospective customers for participating health plans. Risk is spread over a large group of individuals rather than one person or a family, which helps stabilize rates and premium expense.
Premium assistance will be available through the Exchange in 2014 to eligible individuals and families with incomes between 133 and 400 percent of the federal poverty level (In 2010, this was approximately $29,000 to $88,000 for a family of four). These Federal funds will go directly to the health plan and the Exchange will ensure that eligible Californians receive this benefit. Federal subsidies may not be available for individuals who are eligible for Medicaid, CHIP, Medicare, TRICARE, employer-sponsored coverage, or a grandfathered plan.
HMO, PPO, or fee-for-service health plans will be offered through the Exchange. All plans must provide the minimum “essential benefits” including:
- Outpatient patient services
- Emergency services
- Maternity and newborn care
- Mental health, substance abuse, behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services
- Chronic disease management
- Pediatric services, including oral and vision care [iv]
Additionally, all plans participating in the Exchange must charge the same premiums inside and outside the Exchange. They must offer at least the following:
- “Gold” plan (higher premium / lowest co-pay)
- “Silver” plan (lower premium / higher co-pay)
- “Catastrophic” plan (high deductible plan)
- Offers a child-only plan (for individuals under age 21)
The Exchange will help you decide which plan is best for you by providing the following tools and information:
- A website that presents benefit options in a standardized format including price and quality ratings
- An electronic calculator that determines the actual cost of coverage and takes into account eligibility for premium assistance
- A toll-free hotline
What is California Doing Now?
Although State-based health exchanges are not required to be operational until 2014, work is already underway in California to conduct necessary market research and planning. California’s Health Benefits Exchange will take what is now a very complicated and confusing process and turn it into a simple, easy to navigate experience that benefits consumers.
Federal funding will support development and implementation activities that California will undertake through 2014. Go to California’s Health Benefits Exchange website for reports on ongoing progress.
[i] The US Department of Health and Human Services, (2010, July 29). Health insurance exchanges: state planning and establishment grants. Retrieved from http://www.healthcare.gov/news/factsheets/esthealthinsurexch.html
[ii] The US Department of Health and Human Services, (unknown publication date). Glossary - exchange. Retrieved from http://www.healthcare.gov/glossary/e/exchange.html
[iii] California Health Care Reform, (unknown publication date). Developing a health benefit exchange to make it easier to shop for and buy insurance. Retrieved from http://www.healthcare.ca.gov/Priorities/HealthBenefitExchange.aspx
[iv] Piper, K. (2010). State health exchanges and qualified health plans briefing for medicaid health plans of america . Proceedings of the San Diego Webinar, unknown URL slide 12.