As is the case in all states, insurance regulations in California will continue to evolve over the next two years as the full provisions of the 2010 Patient Protection and Affordable Care Act come online. Already, children are protected against exclusion from coverage due to pre-existing conditions, a shield adults will enjoy by 2014. Children up to age 26 can stay on their parents’ health insurance policies regardless of marital or educational status.
Primarily, states are now charged with running temporary high-risk pools and formulating plans to move forward with health insurance exchanges to be in compliance with federal health care reform. It is important for consumers to realize health insurance will continue to be a shifting landscape as we draw nearer to 2014 and beyond. Understanding applicable state regulations and provisions is essential to finding and maintaining affordable and comprehensive coverage and determining eligibility for safety net programs like Medicare, Medicaid, and CHIP programs for children.
Basic Insurance Regulations
State law in California protects existing policy holders from cancellation as long as they were truthful on their application and made all premium payments on time. Rates can still be raised, however, and under some circumstances specific types of coverage may be denied.
New laws now on the books in California protect non-English speakers in the state who have often received incorrect medication or a wrong diagnosis due to the language barrier. Every insurance company health plan must now offer free language services by phone, video, or through an on-site interpreter for plan members who are not fluent in English.
Although California has rigid insurance regulations that require all residents to have some type of health insurance coverage, 14 percent of Californians are without medical insurance. Currently, few protections extend to the purchase of individual plans, and companies may deny coverage for many reasons.
Creation of the Required Health Care Exchanges
California was the first of the states to implement its health care exchange, opting for the active purchaser model and serving as an example to other states in addressing complex issues like coordination with existing public programs and achieving a cost conscious final product.
Pre-Existing Condition Insurance
California’s Pre-Existing Condition Insurance Plan is administered by the Managed Risk Medical Insurance Board. Premium levels are based on the age of the subscriber and their region of residence within the state. As an example, a premium for a 50-year-old subscriber who is a resident of San Francisco would average $480, with an annual deductible for medical services within the network of $1,500 ($3,000 outside of the network.) Deductibles for brand-name prescriptions are $500 across the boards, and maximum out-of-pocket charges set at $2,500 inside the network.
Each state determines its own qualifying income levels for Medicaid eligibility as a percentage of the current Federal Poverty Level. For infants under 1 year, the Medicaid level is 200% FPL; children 1-5 qualify at 133%; and age 6-19 at 100%.
Pregnant women can access Medicaid benefits at 300% FPL, with qualified uninsured parents at or below 200% eligible to access aid through the Coverage Initiative under California’s Medi-Cal Hospital Uninsured Care Act. Qualified parents under traditional Medicaid are covered at 100% FPL; adults at 200%; and non-elderly disabled citizens on Social Security at 102%.
Approximately 4,470,000 residents of the state are enrolled in the California Medicare program with more than 1,547,000 using state-approved Medicare Advantage plans to supplement the standard level of federal benefits. About $31,000 is spent per California residence in Medicare benefit payments.