Covered California, the state's new health insurance marketplace,
brought its road show to Long Beach Friday, promising affordable coverage to
individuals and families who don't get it through an employer or a government
The state-run exchange, based in Sacramento, was established under the Affordable Care Act -- commonly known as Obamacare -- to promote the law's central goal of insuring millions of people who are currently uninsured.
Peter V. Lee, Covered California's executive director, was hopeful the federal reform law will change the national discourse on healthcare. "For the first time in America, we are saying that health care is a right, not a privilege," he told a less-than-overflow crowd at a "town hall" meeting at Cal State University Long Beach.
Of the state's roughly 7 million uninsured people, Covered California believes about 5.3 million are potential customers of the health plans it will be selling through the exchange. Of those, about half will be eligible for federal tax subsidies to help defray the cost of their insurance premiums. The subsidies, on a sliding scale based on income, age, zip code and family size, are at the heart of the Obamacare strategy to make insurance affordable.
Lee served up two examples of how the subsidies might work, based on the second, least-expensive type of plan, known as the "silver" plan. In the first example, a single 25-year-old male who lives in Long Beach and makes $22,000 a year would get a monthly subsidy of $92. His share of the premium would range from $84 to $141 per month, depending on which plan he chose among the seven available to him.
The plans sold through the exchange are all operated by private insurers, including small regional companies and some of the national giants.
In the second example, a Long Beach family of four with an annual income of $65,000 and parents both in their 40s, would get a subsidy of $295 per month, leaving it with an out-of-pocket monthly cost of $383 to $604, depending on which of the seven plans it selected.
The exchange, in compliance with Obamacare, will offer four tiers of coverage: bronze, silver, gold and platinum. The bronze plans have the lowest premiums but also the least generous benefits if you need care. Platinum plans are the most expensive, and most generous, plans.
The exchange offers a "shop and compare" calculator on its website (www.coveredca.com), allowing people to see what their health plan options and potential subsidies will be.
Covered California will open for business on Oct. 1, selling coverage that takes effect Jan. 1. People can buy insurance online, over the phone or in person with a licensed agent or exchange-certified enrollment counselor. Enrollment, for the first year only, is open until March 31. In subsequent years, the enrollment periods will be Oct. 1-Dec. 1.
Just three weeks before its opening date, Covered California is still relatively unknown to the general public -- a fact that can largely be attributed to its strategy of holding off on a planned media blitz until it opens its doors.
"Starting in October, you are going to be seeing us on the airwaves," Lee said. "You're going to be seeing us in the schools and churches."
Between Oct. 1 and the end of 2014, Covered California plans to spend $80 million on a public relations campaign that will span television, radio, print and social media. It will also enlist a wide range of community organizations -- not just churches and schools, but charities, labor unions, universities and local government agencies -- to spread the word in neighborhoods across the state.
On a table outside the town hall meeting room, the exchange provided fact sheets and FAQs in twelve different languages. Lee said the exchange would also reach out to the gay, lesbian and trans-gender communities. "If we do not address the diversity of California, we will not be successful," he said.
Critics of Covered California, including many insurance brokers, say the health plans will be more expensive for many people than what they can buy in the current market. That, they say, is because Obamacare mandates a certain minimum level of benefits, which means cheaper plans will no longer be available.
Coverage may be more expensive for many young people than it is today, because the health care law sharply narrows the multiple on premiums for the oldest patients compared to the youngest ones, from five times to three times. That means younger people, who tend to be healthier, will in effect be subsidizing care for older people to a larger extent than they do now.
Chronically ill people, who need expensive specialty drugs and frequent laboratory tests, also could be financially worse off, because the exchange-sponsored health plans will charge them a percentage co-insurance rate of up to 30 percent, rather than the flat co-pays that many plans currently charge on prescription medications.
On the other hand, there is a plan to fit almost every family budget -- especially when subsidies are factored in -- and nobody can be rejected because of prior health problem.
Lee acknowledged that Obamacare, and Covered California, are works in progress and will evolve over time. "This is the starting line of an historic change -- the biggest change since Medicare was created 50 years ago," he said. "It's not going to be easy or simple."
Covered California is the first exchange set up in the U.S., and because of its huge and diverse constituency, it is widely viewed as a model for the rest of the nation. Los Angeles County is vital to its efforts.
"If the Affordable Care Act does not work in L.A. County, it's not going to work in California," Lee said. "And if it doesn't work in California, it's not going to work in America."
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