[Noozhawk's note: This article is part of a Noozhawk special project for The California Endowment Health Journalism Fellowships, a program of USC's Annenberg School for Communcation & Journalism. On Tuesday, Day 8.]
New health-care laws will affect insurance coverage for everyone, not just people who are eligible for government-subsidized plans.
Starting in 2014, all individual and small group plans have to cover “Essential Health Benefits” and provide certain preventive care, like screenings and vaccines, without co-pays or deductibles.
Most women’s care screenings and contraceptive methods will be provided for free, too.
What counts as preventive care is very vague, according to Kurt Ransohoff, CEO of Sansum Clinic.
It seems that a yearly physical without current complaints would be covered with no co-pay, but if someone is experiencing a health issue — like headaches, perhaps — during an appointment for a physical, it may not be, he said.
“A lot of people have complaints and it’s complicated whether it counts as a physical or appointment for a complaint,” he said.There are new rules for health insurance companies, too. They can’t cancel health insurance because someone gets sick and can’t put a lifetime or yearly dollar amount cap on coverage.
Companies have to publicly justify any rate increase of 10 percent or more before raising the premium, and have to spend at least 80 percent of money from premiums on health care costs instead of administrative, overhead and marketing costs.
One of the biggest changes in coverage is the inclusion of mental-health and substance-abuse services.
Although California has had mental-health parity laws for years (which requires insurers to cover mental health treatment like any other health condition), the ACA makes it federal law.
That upgrade will make a big difference in enforcing that it’s followed, said Janice Rocco, deputy commissioner of health policy for the state Department of Insurance.
Mental-health care is a huge issue in this county. The lack of inpatient beds pushes patients into the emergency rooms, which causes delays for all other patients.
Everyone can buy a plan off the state exchange, called Covered California, which has plans from private insurance companies.
The prices depend on a person’s age, income and family size, and anyone who earns below $44,000, or $94,000 for a family of four, can receive subsidies for their premiums.
For Santa Barbara, San Luis Obispo and Ventura counties, there are plans from Anthem PPO, Blue Shield PPO, Ventura County Health Plan HMO and Kaiser Permanente HMO.
However, there are realistically only two options for most local residents, since no Kaiser providers serve Santa Barbara County, and only Ventura County employees can sign up for the county health plan HMO.
Covered California expects 95,000 people in the Tri-Counties to be eligible for subsidies, and there will be five levels of coverage plans, from minimum to platinum.
There’s a lot of uncertainty about how many people will actually sign up for and purchase insurance come Jan. 1, Ransohoff said.
The exchange has been a big focus for the Sansum Clinic and Cottage Health System, which obviously serve more commercially insured patients than the safety net clinics.
The new system depends on most people having coverage – thus, the individual mandate – so rates theoretically are lower with more people paying into the insurance pool.
“Young invincibles” who are healthy need to join to help cover people who have a lot of health issues, Ransohoff noted.
The individual mandate was upheld by the U.S. Supreme Court, and is a central piece of the ACA: every citizen and legal resident will be required to get insurance, either through a government program, a state exchange or individual market.
There are financial penalties for being uninsured, unless someone qualifies for an exemption (like not making enough money to even pay taxes).
The penalty for being uninsured will be the greater of a dollar amount per person (which will be $695 in 2016, half that for children) or a percentage of the household’s income, which will be 2.5 percent in 2016 and beyond.
The flat rate is subject to inflation and both penalty formulas are subject to a cap.
CenCal Health, the Medi-Cal administrator for Santa Barbara and San Luis Obispo counties, is preparing for 30,000 more people to enroll over the 18-month period starting Jan. 1.
That will expand the existing program by 30 percent, CenCal CEO Bob Freeman said.
There are a lot of outreach efforts to help people sign up for the program, and pre-registration starts in October so officials can track it easier.
It’s harder to predict the impact of exchanges, Cottage Health System CEO Ron Werft said.
“I just don’t think we’re going to know until a year or two into this thing – what kind of penetration we’re going to see and how many individuals, particularly healthy individuals, are going to pay the penalty versus pay the money to sign up for the health plan.”
Private doctors can still refuse any kind of insurance, and often do, Werft noted.
Despite state oversight in organizing the exchange, the state insurance commissioner doesn’t have control over the rates.
Efforts to get that authority have been defeated by lobbyists so far, but the issue may go onto the November 2014 state ballot, Rocco said.
Thirty-five other states and the District of Columbia do have authority to reject high premiums.
This leads to concern about affordability, especially for young, healthy people who may pay the penalty instead of signing up, Ransohoff said.
Two private insurance companies are leaving the California individual market altogether.
UnitedHealth Group Inc. and Aetna Inc. will still have employer plans, but didn’t have large enough portions of the market to stay, according to the Los Angeles Times.
Anthem Blue Cross, Kaiser Permanente and Blue Shield of California have 87 percent of the individual market, the Times reported.
UnitedHealth had 8,000 policyholders and Aetna had 50,000 policyholders, and they can’t return to the California individual market for five years after they leave.
Businesses no longer have to provide coverage for employees next year, which was an original provision of the ACA that was delayed until 2015.
The delayed mandate for large employers means there won’t be as much of an impact Jan. 1, Werft said.
There’s new speculation every day whether employers will keep having coverage or cancel insurance, pay the penalty and send people to the exchanges or to the ranks of the uninsured, he said.
Other stories in the Safety Net series: