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March 21, 2013 /PRNewswire/ -- On the eve of the third anniversary of the Affordable Care Act (ACA), the California Association of Health Plans (CAHP) announced today that its members are continuing to move forward with implementation of this historic change in the state's insurance marketplace, and it is redoubling its efforts to educate Californians about the ACA's many benefits and impacts on their coverage.
To implement the ACA,
California health plans already extended coverage to children up to age 26 on their parents' policies. They also ended lifetime limits on coverage, eliminated out-of-pocket costs for preventive services and are continuing to work on other aspects of ACA's implementation.
As part of its education efforts, CAHP released a new
fact sheet today that provides the list of free preventive services offered through
California health plans. The association is increasing its public outreach and education about the changes in the state's insurance marketplace in the wake of a new Kaiser Family Foundation
poll that found the ACA remains a mystery to two-thirds of Americans.
"The ACA will provide subsidies to help purchase insurance, and it will expand coverage to millions of uninsured Californians, improving their access to health care and helping them to avoid financially crippling medical bills," said
Patrick Johnston, CAHP president and CEO. "As we mark the Act's third anniversary, CAHP is committed to informing the public and stakeholders about the ACA and helping to prepare them for these fundamental changes in the insurance marketplace."
California, most people will see little, if any, change in their premiums from the ACA because they get their coverage through their employer or a government program. But the
5.6% of Californians who obtain coverage in the individual market and some small businesses will see significant changes in their premiums.
They will be able to comparison shop for health plans through the state's new health insurance exchange, Covered California, beginning Jan.1. Subsidies will be available for purchasing coverage, lowering out-of-pocket costs for many Californians. But the enhanced new health products required by the ACA come at a cost, and that means those who earn too much to qualify for a subsidy may see their premiums rise. Among the changes that will drive up premium prices for these Californians are:
Richer benefits for individuals: The ACA's requirement for richer benefits for individual insurance will make these offerings more like employer-provided plans with expanded coverage and lower deductibles and co-pays. With richer benefits, Californians in the individual market may be required to purchase health insurance that is more costly than they currently have and that offers additional benefits they may never use, such as pediatric dental care for beneficiaries who have no children. They may, however, have lower out-of-pocket costs as a result of lower deductibles and co-pays.
Younger beneficiaries lose some of their advantage: The ACA will change the way health plans calculate benefits, causing significantly higher premiums for younger beneficiaries. Because they were expected to be healthier, younger Californians previously paid about $1 for every $5 in premiums from older Californians. The ACA limits the difference to 3-1, which will bring significant increases for younger people and lower premiums for older people.
New taxes imposed: The ACA will impose more than $100 billion in sales tax over 10 years to help pay for expanding coverage – adding nearly $5,000 to more than $7,000 to an average California family's premiums over a 10-year period.
"While California health plans support the ACA's implementation, their first obligation, under law, is to pay their members' medical bills, which consume an average of
89 cents out of every
premiums," said Johnston. "At the same time, chronic disease and obesity rates are skyrocketing, contributing to rising medical expenses that have outpaced inflation by almost
250%. With growing health care expenses and narrow
profit margins, there's really no room for premiums to absorb the increasing costs of care. All of us – insurers, patients, doctors, hospitals and government – must work together to lower costs and ensure coverage is affordable."
CAHP is a statewide trade association representing 39 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