Covered California, formerly known as the California Health Benefits Exchange, was created following the passage of the federal Patient Protection and Affordable Care Act (ACA). The mission of Covered California is to “increase the number of insured Californians, improve health care quality, lower costs, and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value.”

Catherine Atkins, JD
Deputy Chief Executive Officer
July/August 2013

Covered California recently announced the 13 health insurance plans that will offer health care coverage starting in 2014. Before the selection is finalized, the health plans are subject to a rate review by state regulators. Covered California noted that it is impossible to make a comparison of the submitted rates to existing premiums in the commercial market because, in 2014, there will be new standard benefit designs under the Affordable Care Act, and the actual change in an individual’s premium will depend on the person’s current insurance coverage. The rates submitted to Covered California for the 2014 individual market ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions. Covered California finds this reassuring as the 2014 products include doctor visits, prescriptions, hospital stays and more essential benefits.

The 13 health insurance plans are: Alameda Alliance for Health; L.A. Care Health Plan; Anthem Blue Cross of California; Molina Healthcare; Blue Shield of California; Sharp HealthCare; Chinese Community Health Plan; Valley Health Plan; Contra Costa Health Services; Ventura County Health Care Plan; Health Net; Western Health Advantage; and Kaiser Permanente.

Following the release of the 13 health care plans, Insurance Commissioner Dave Jones stated in his May 23, 2013 press release:

“As important as this progress is, there is still much more work to be done. Because the proposed rates are to be filed with the Department of Insurance and the Department of Managed Health Care today, it is premature to hazard an opinion as to how these rates compare to rates in the individual market today or whether they are justifiable... There are only three statewide health insurers selling in Covered California, which means less statewide competition than we’d hoped to see in the new marketplace... I remain very concerned that there is no legal authority in California to reject unreasonable and excessive rate hikes. Health insurance rates have increased dramatically over the last several years, and are likely to continue to climb unless California law is changed to provide consumer protection through effective health insurance rate regulation, which means the authority to reject excessive rate hikes. Rate regulation has proven an effective consumer protection with tens of billions of dollars returned to consumers and businesses through rate reductions over the 25 years rate regulation has been in effect for other lines of insurance, such as auto and homeowners. We need to change California law to require health insurers to justify their rates and to provide the legal authority to reject excessive health insurance rate increases.”

It was noted that 34 other states have given their insurance regulatory agency the authority to reject excessive and unreasonable health insurance rates.

To learn more about Covered California and health care reform generally or review an in depth booklet about the new health care system, please visit coveredca.com.