What type of health insurance exchange does California have?
Covered California is a state-run exchange, led by CEO Jessica Altman. The majority of U.S. states use the federally-run exchange (HealthCare.gov) but there are 18 fully state-run exchanges, and Covered California is among them.
California was the first state to authorize a state-run exchange under the Affordable Care Act, with former Gov.
Arnold Schwarzenegger signing legislation in 2010 to create the exchange. California’s exchange — Covered California — is widely considered one of the country’s most successful. As of March 2022, Jessica Altman, who previously served as Pennsylvania’s insurance commissioner, will be Covered California’s CEO, replacing Peter Lee, who had been the CEO of Covered California since its inception.
Enrollment in California’s exchange is second only to Florida — and possibly Texas — with more than 1.8 million individual market enrollees as of early 2022. There were also more than 62,000 people enrolled in small group plans through Covered California’s SHOP platform as of late 2020.
Covered California has also enrolled millions of people in Medi-Cal (Medicaid)
Since the exchange began operating in 2013 (Medicaid enrollment fluctuates throughout the year, but California’s total enrollment in Medicaid and CHIP grew by more than 6.1 million people from late 2013 to mid-2022). Not coincidentally, the state’s uninsured rate has dropped considerably: From 17.2% in 2013 to 7.2% in 2018, according to US Census data (although it increased to 7.7% in 2019).
California has been proactive in terms of enacting legislation to ensure that the individual market remains stable: California law banned the sale of short-term health insurance plans as of 2019, and prevents sole proprietors and partners from purchasing association health plans coverage instead of individual market plans.
And as of 2020, California implemented an individual mandate and began offering state-based premium subsidies for people earning up to 600% of the poverty level (these subsidies are no longer necessary, because the American Rescue Plan has enhanced federal premium subsidies, more than covering the portion that California had previously been covering).
Covered California is one of ten state-run exchanges that uses an “active purchaser” model
Meaning that they negotiate directly with carriers to make sure that rates, networks, and benefits are as consumer-friendly as possible (the remaining state-run exchanges and the federally-run exchange set minimum standards that carriers must meet, and then allow the sale of any plans that meet those guidelines; that’s known as a clearinghouse model as opposed to an active purchaser model).
Covered California is also the only exchange in the country that requires all health plans to be standardized
This means that within a single metal level, all plans have the same benefits (except for HSA-qualified plans, which are also standardized but with benefits that are different from the other bronze and silver plans; Covered California’s board approves changes to the standardized HSA-qualified benefit design, as needed to comply with IRS regulations pertaining to HSA-qualified plans).
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EPIA inc. is a private Insurance Agency with no ties with legal entities. The information contained in this article is based on information provided by the Medicare Official Website.