Beginning in 2014, two provisions of the new federal law are designed to improve affordability of coverage and the organization and transparency of the insurance marketplace.
- The Act provides federal tax credits to low to moderate income people (133-400 percent of the federal poverty level) who do not receive employer provided health benefits.
- The Act authorizes states to establish a Health Benefit Exchange so that individuals buying insurance using the federal tax credits have access to high value health plans.
Federal law provides the Exchange with these functions:
- Determine whether an individual or family is eligible for a tax credit,
- Select those health plans that are offered to persons purchasing coverage through the Exchange,
- Provide comparative information regarding the cost, quality and value of the health plans offered,
- Serve as the only place where federal tax credits may be used for the purchase of health insurance.
On October 4, 2010, the Health Care Reform Implementation Task Force submitted comments to the federal Department of Health and Human Services regarding draft federal regulations. Review the comments here.
First members of California Health Benefit Exchange Board Announced - NEW!
On January 1, the California Health Benefit Exchange will be established under California law.
The California Health Benefit Exchange will help California consumers and small businesses shop for and buy competitive health insurance starting in 2014. California was the first state in the nation to enact legislation creating a health benefit exchange under federal health care reform. (Chapters 655 and 659, Statues 2010 (Perez & Alquist)).
Starting in 2014, the California Health Benefit Exchange will make it easier for individuals and small businesses to compare plans and buy health insurance on the private market. The Exchange will enhance competition and provide the same advantages available to large employer groups by organizing the private insurance market, including a more stable risk pool, greater purchasing power, more competition among insurers and detailed information regarding about the price, quality and service of health coverage.
- The Exchange will support consumer choice by making comprehensive information about health plans available in an objective, easy-to-understand format, including:
- a website that provides standardized comparison information on qualified health plan benefit plans/options
- a calculator for applicants to compare costs across plan options
- a web-based eligibility portal to help link individuals to health coverage options available to them
- a toll-free consumer assistance hotline
- Eligibility: Individuals and small employers meeting federal citizenship requirements may enroll in the exchange. Federal health care reform makes tax credits and subsidies available in 2014 to Californians with incomes between 133 and 400 percent of the federal poverty level (approximately $29,000 to $88,000 for a family of four). The Exchange will ensure that Californians eligible for federally-authorized tax credits and subsidies get those benefits. Small employers with less than 100 employees may also purchase coverage through the exchange.
- Costs: The federal government awarded California $1 million to fund preliminary planning efforts related to the development of an exchange. Additional federal implementation grants are expected be announced in the spring of 2011. After 2014, the Exchange must be self-supporting from fees paid by health plans and insurers participating in the Exchange. No state General Funds are appropriated for operation of the Exchange.
- Health plan and insurer participation in the Exchange is voluntary: Health insurance products offered through the Exchange must be available in the same form to consumers purchasing coverage outside the exchange. All health plans and insurers participating in the Exchange must offer all Exchange plans at the federally designated bronze, silver, gold and platinum levels. Catastrophic plans will only be available through health plans and insurers participating in the Exchange. The catastrophic plans will be available both inside and outside the Exchange from these health plans and insurers.
The Exchange is established as an independent public entity within state government with a five-member board appointed by the Governor and the legislature. Two members will be appointed by the Governor; one by Senate Rules Committee; and one by Speaker of Assembly. The Secretary of HHS or designee will serve as an ex-officio voting member of the Board. Appointed members will serve four year terms.
- Members of the board or of the staff of the Exchange are subject to strict conflict-of-interest provisions. They may not be employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a carrier or other insurer, an agent or broker, a health care provider, or a health care facility or health clinic.
The Exchange does not change how existing state health care coverage programs are administered. Medi-Cal and the Healthy Families Program will continue to be administered by the Department of Health Care Services and the Managed Risk Medical Insurance Board, respectively.
- The Exchange will screen for and enroll individuals in Medi-Cal or the Healthy Families Program if they are eligible for those programs. The federal law requires state exchanges to perform this function.
- The Exchange will coordinate with Department of Health Care Services, the Managed Risk Medical Insurance Board, and California counties to ensure that individuals are seamlessly transitioned between coverage programs if their eligibility changes.
Grants
The state of California received the following grant to plan for the new exchange:
California received $1 million Exchange Planning and Establishment Grant, to be used to develop a detailed business and implementation plan leading up to the 2014 operation of the California Exchange. This planning grant will enable California to inventory and analyze existing state and local programs and resources; develop appropriate workplans and timelines for Exchange implementation; begin to define the additional infrastructure, resources, data and coordination activities that will be needed to make the California Exchange operational by 2014, consistent with federal requirements and available federal funds; and engage, educate and inform policymakers, stakeholders and the public about the California Exchange and its role in the implementation of federal health care reform. View the full grant application