You might not know it from the near-incessant fighting over the 2010 federal healthcare law, but its main provisions -- the ones designed to bring coverage to millions of the uninsured -- won't go into effect until next year. State officials gave Californians their first look Wednesday at some of those changes, revealing what the out-of-pocket costs would be for a new, standardized set of insurance policies.
The chart comes from the Covered California insurance exchange, one of the new state marketplaces for individual insurance policies created by the Patient Protection and Affordable Care Act (a.k.a. Obamacare). As required by the Affordable Care Act, it will make four basic types of policies available: Bronze, Silver, Gold and Platinum. Insurers who want to offer a different flavor of coverage in the exchange could do so only with Covered California's permission.
All four of the basic policy tiers will cover at least the essential benefits mandated by Obamacare; under state law, that means the policies must cover at least as much as Kaiser's HMO plan for small businesses does. Where they will differ is in the amount of out-of-pocket costs. The Platinum tier has the lowest deductibles and copays, so its premiums should be higher than the plans in the other tiers. The Bronze plan, by contrast, has a high deductible, so its premiums should be significantly lower.
Congress wanted to accomplish at least two things with the standardized insurance plans. One was to make sure insurers didn't sell policies that ignored costly risks and left customers underinsured. Another was to make it considerably easier for consumers to compare plans when shopping for insurance.
The new chart by Covered California shows how much simpler the process will be. There will be no variation in out-of-pocket costs among policies within each tier; for example, all individual Bronze plans will have a $5,000 deductible and a $120 copay for urgent care after the deductible is reached, and all Gold plans will have no deductible and a $90 copay for urgent care. The main differences within the tier will be the monthly premiums and, potentially, coverage for some less common types of care, such as infertility treatments or prosthetics.
The federal government will provide tax subsidies to anyone earning less than four times the federal poverty level. Those subsidies effectively limit premiums to a percentage of a person's income; according to Covered California's chart, premiums for a Silver plan would range from $19 a month for a single person near the poverty line to $1,255 for an adult with seven dependents who just barely qualifies for subsidies. Insurers haven't filed their proposed rates, so there's no information yet about premiums for other coverage tiers or for individuals who aren't eligible for subsidies.
Anthony Wright of Health Access California, a consumer advocacy group, welcomed Covered California's efforts. "Consumers trying to buy health coverage today face a complex and confusing experience, facing fear of the fine print," Wright said. "The standardization of benefit designs will make it easier for consumers to compare health plans. It will force insurers to compete on cost and quality and customer service rather than consumer confusion."
That's the idea, but Covered California is missing a key piece of the puzzle: the data needed to help consumers compare how well each insurer's network of doctors and hospitals performs. That sort of information is really hard to come by because not much is collected, at least not yet.
The Affordable Care Act calls for the federal government to develop "quality measures" for doctors and hospitals, and that work is underway. But it's not aimed at providing consumers more information about how well (or poorly) different providers perform; instead, the data will be used mainly to support new federal efforts to incentivize better, more efficient care.
Having effective competition requires informed consumers. The standardization advanced by the Affordable Care Act and Covered California will make it easier for consumers to compare plans in terms of the value they promise, but the lack of information about the quality of care delivered by the providers in their networks make it impossible to judge just how much value they deliver.
Of course, if the insurers all have overlapping provider networks, then the lack of performance data wouldn't matter much to consumers trying to choose an insurer. But it does matter to those trying to pick a primary-care doctor, especially for those choosing an HMO under Covered California's new Gold or Platinum tiers.