How prepared is California for implementation of the federal Patient Protection and Affordable Care Act, and what does the state have to do before it can comply?
California has been described by others as setting the pace in its implementation of federal healthcare reform, also known as the federal Patient Protection and Affordable Care Act (ACA), as the state was one of the first to establish a healthcare benefit exchange. Starting in late 2013, the California Health Benefit Exchange will make it easier for individuals and small businesses to compare healthcare plans and purchase healthcare insurance in the private marketplace.
The Exchange will enhance competition and provide the same advantages available to large employer groups to small employers and individuals by organizing the private insurance market to make it easier for consumers to compare products; establish a more stable risk pool; provide greater purchasing power to consumers; create competition among insurers; and offer detailed information regarding the price, quality and service of health coverage.
Additionally, the Exchange will support consumer choice by making comprehensive information about health plans available in an objective, easy-to-understand format, which will include: A website that provides standardized comparison information on qualified health plan benefit plans/options; A calculator for applicants to compare the costs of the various plans offered; A web-based eligibility portal to link individuals to the health coverage options that they qualify for; and, a toll-free consumer assistance hotline.
Since the ACA was passed in 2010, the State of California has enacted more than a dozen laws and budget proposals to implement the ACA, and many Californians are already benefiting from these laws.
Health plans are now required to allow parents to keep children up to age 26, without job-based health coverage, on their family coverage and, thanks to this provision, as of December 2011, 435,000 young Californians have health insurance coverage.
Millions of people on Medicare in California received free mammograms and colonoscopies—or a free annual wellness visit with their doctor.
More than six million Californians with private health insurance gained preventive service coverage with no cost-sharing.
Since August, approximately five million California women have guaranteed access to additional preventive care services without cost-sharing.
As of this year, health insurance companies had to spend at least 80 percent of premium dollars on healthcare and quality improvements and could not spend more than 20 percent on overhead expenses, executive salaries or marketing costs. If they do not achieve this spending standard, companies must provide consumers with rebates or reduce premiums, and in 2012 almost two million privately insured Californians have received $73,905,280 in rebates from insurance companies.
Insurance companies are also now banned from imposing lifetime dollar limits on health benefits—freeing cancer patients and individuals suffering from other chronic diseases from having to worry about going without treatment. Annual limits will be banned completely in 2014.
This past April, 8,662 previously uninsured residents of California who were locked out of the health coverage because of a pre-existing condition became insured through a new Pre-Existing Condition Insurance Plan.
And, thanks to the ACA, 354,592 people with Medicare in California received a $250 rebate to help cover the cost of their prescription drugs when they hit the donut hole in 2010, with mandated discounts having resulted in an average $585 per person savings to participants and, by 2020, the donut hole will be completely closed.
However, we still have more work to do. As I mentioned last month, the biggest federal issues California still needs to tackle are the requirement that all states limit the factors health plans can use to determine premium rates; the elimination of preexisting condition exclusions and making a determination if California’s Medicaid program will be expanded for the lowest income individuals. I am optimistic that we will address these issues and am working with my legislative colleagues to help as many Californians as we can obtain health insurance coverage.
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