New Infographic Explains How the ACA Will Impact Premiums & Coverage in California

SACRAMENTO, Calif., Sept. 4, 2013 /PRNewswire/ -- The California Association of Health Plans (CAHP) released a new infographic today explaining how the implementation of the Affordable Care Act (ACA) will impact health plan premiums and coverage for Californians. The infographic illustrates seven new rules that will be implemented with the ACA and what each rule will mean for individuals and families purchasing coverage in the state's new individual insurance market.

The rules will set a new benchmark for health coverage purchased by individuals and families. When the ACA is implemented in 2014, health coverage purchased by individuals and families will be more comprehensive and predictable. This new coverage will more closely resemble what most Californians already receive through their employer.

"The changes reflect not just a new market, but a new product. Californians will get more comprehensive benefits and deductibles and co-pays will be limited," CAHP President & CEO Patrick Johnston noted. "Pre-existing conditions will no longer be taken into consideration and pricing based on age will be restricted. So while monthly premiums for some may be higher, their out-of-pockets costs will go down because they will be paying less at the doctor's office."

The changes will affect individuals differently depending on their unique circumstances—many people will pay less in monthly premiums than they did before, but some will see an increase. More than two and a half million moderate- and low-income Californians purchasing coverage through Covered California will qualify for subsidies, allowing them to pay even less for coverage while enjoying more comprehensive benefits.

CAHP's new infographic lays out seven of the reasons some Californians will pay more, and some will pay less, as a result of new rules that will be effective next year:

• Health plans will come standard with more comprehensive benefits, making coverage purchased by individuals and families more closely resemble employer coverage. This increase in benefits may increase premium prices for some. 
• Subsidies will be available to help purchase coverage. While total premium prices may increase for some, an estimated 2.6 million Californians will qualify for federal subsidies.
• Health plans will all use the same 19 rating regions. These new maps may cause health care costs to be higher, or lower, in some areas than they were before.
• New limits will be placed on age-based pricing. Older people can currently be charged up to five times as much as younger people, but, beginning in 2014, this will be reduced and older Californians can only be charged up to three times more. This change will lower costs for many older Californians but may increase costs for younger people.
• Coverage cannot be denied for preexisting conditions. Instead, the costs of care for those with preexisting conditions will be shared throughout the insurance pool, meaning lower costs for the sick and some higher costs for the healthy.
• Health status will not be factored into premium prices. Individuals will not pay higher premium prices for poor health status. Instead, the costs of care will be spread to all.
• Health plans will pay a greater percentage of the costs of care, resulting in lower overall out-of-pocket costs for many. Paying less out-of-pocket for co-pays and deductibles may mean higher premiums for some as the premiums will absorb more of the costs of care.

As the state moves towards implementation of the ACA in 2014, California's health plans are committed to improving affordability and the quality of care for all Californians. Only by all of us working together – hospitals, doctors, patients, health plans and the government – will we find the right prescription for delivering health care more efficiently and affordably.

For more information on how the ACA will impact premiums and coverage please visit Individual Health Coverage: New Rules Impact Premiums & Coverage, Understanding Subsidies and 7 Ways the Affordable Care Act will Impact Individual Health Insurance.

CAHP is a statewide trade association representing 40 full-service health plans. Through legislative advocacy, education and collaboration with other member organizations, CAHP works to sustain a strong environment in which our member plans can provide access to products that offer choice and flexibility to the more than 24 million members they serve. For more information, please visit www.calhealthplans.org or call (916) 552-2910.

SOURCE California Association of Health Plans