Are the benefits of Covered California’s IFPs appealing to Californians?

Now that Californians are enrolling in Covered California’s Individual and Family Health Plans I’m surprised we haven’t heard more comment about these plans.

Let’s take a look at the bronze level plan. First off, it requires the member to pay for a $5,000 deductible. That deductible must be met before any copays for generic or brand Rx kick in. The member does get three office visits covered for just a copay, but when the member goes in for that fourth visit, if the $5,000 deductible has not been met, the member must satisfy meeting the deductible. In all, the member’s annual out-of-pocket maximum is $6,350.

A thorough search of the current commercial marketplace only turns up a few plans with benefits as low as a Covered California bronze plan.

Now, let’s look at the other end of the spectrum. How appealing are the Covered California Platinum plans? We’ve taken a look and we’re pretty sure people are going to absolutely love the platinum plans. We’re looking at no deductible plus additional first dollar benefits of copays and co-insurance. Who wouldn’t love that plan design?

So when we researched the current market to find anything similar to a 2014 platinum, we came up with nothing. Not a single plan in the current market in California has benefits as rich as the Covered California platinum plans.

Reviewing the plans at both ends of the Covered California spectrum leads me to ask a few questions.

First of all, who would find the bronze plan appealing, regardless of how low the premium? Are we to expect those currently uninsured to jump up and buy a plan in 2014 that has lower benefits than the plans they are refusing to purchase in 2013?

I predict some people will respond to my question with the argument that there are people who aren’t buying those plans in 2013 because of underwriting. That’s a valid response and I agree that individual and family plans should be guaranteed issue. I also think there should be some reasonable pre-existing condition periods to allow for proper pricing of these plans. But I’m getting off track. (You can read more of my thoughts on that subject in earlier posts.)

Back to my questions on Covered California’s plans.

When we look at the amazing benefits of the platinum level plans, my first question is: Will anyone be able to afford these wonderfully rich plans? How many currently uninsured Californians will be able to jump up and purchase the platinum plan?

When I look at the spectrum of the California Exchange in 2014, I see on one end plans with benefits no one would want, and on the other end plans with price tags that no one can afford. This leads me to believe that enrollments in Covered California won’t meet the public projections. In fact it leads me to wonder….Who will enroll? Will it only be those Californians who need a lot of care and need it immediately? If so, how long can the system sustain taking on just this population?

In another month or so, we’ll find the answer to these questions about enrollment, but for now, what are your projections? Leave us your thoughts in the comments.

 

-Mark Reynolds, RHU

4 Responses to “Are the benefits of Covered California’s IFPs appealing to Californians?”

  1. John Pierce Says:

    Totally agree with your analysis…my crystal ball tells me that this adverse selection problem, which has been foreseen, will come to a head in late 2014 and may easily result in premiums going through the roof in 2015…I heard that of the 80k enrollees so far, most are elderly and non-Hispanic.  The millenials are staying away in droves. The $95 penalty doesn’t phase them…sure it will go up in 2015 but for the current tax year, its a small cost to pay..the ER is there for all to use.

    John Pierce Regional Insurance Phone: 760-632-1035 Cell:858-735-5045

    Fax: 775-593-9954 0788910

    ________________________________

  2. Corrin Trowbridge Says:

    My insurance company group plan was renewing my wife, daughter, and I at $2400 per month ($5k deductible) . i went to the exchange and got the Blue Shield Platinum plan for $1095 per month. Slightly higher max out of pocket but the platinum is a 10% coinsurance plan. I think they are making this affordable for a large segment of people qualifying for subsidies, but those making more will see a sizable increase in their premium cost. The CoveredCA site says our doctors will take this insurance, but I will feel much better once they confirm it.
    In the perfect would we would have a blending of the old, with the 70% who were happy with their plans allowed to keep them, and the new, with the exchange providing a marketplace for eveyone else. But my natural distrust of the politicians leads me to think they are going to make a mess of it and then offer a single payer solution to the problem they created.

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