In another major step toward national health reform, California on Thursday unveiled a list of insurers who will offer coverage through the state's new health exchange marketplace, providing the first glimpse into plans and prices for up to 5.3 million people not covered by employers.
Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente and a group of smaller regional providers will offer a variety of health plans.
While many feared "sticker shock" because of uncertainties and changes in health laws, Thursday's announcement failed to answer all the questions about who benefits and who will be paying more. For example, depending on where a 40-year-old single person lives and how much she makes, her monthly premium could be as low as $27 — with a maximum subsidy — or as high as $550.
"These are good rates that people will be able to afford," said Peter Lee, executive director of the marketplace, known as Covered California.
More than 2.6 million people with lower incomes will qualify for subsidies to offset their costs, but others will likely see their premiums rise. A complete list of premiums won't be available until later this year. Some people who have been unable to purchase insurance because of chronic health conditions will be covered for the first time.
And all of the plans will be required to offer 10 essential health benefits, including maternity and newborn care, mental health services, prescription drugs, rehabilitative services and pediatric care.
By standardizing the plans, Covered California is seeking to eliminate the "gimmicks and gotchas" that can surprise people and deprive them of coverage once they get sick, Lee said.
"Starting in 2014, consumers can rest assured that the coverage they're going to get will provide everything they need," he said.
Premium costs will vary not only from plan to plan, but also will depend on where you live.
In Santa Clara County, for example, a 40-year-old single man who is not eligible for a subsidy would pay $254 to $506, depending on which plan he selects and the amount of cost-sharing involved. But if he qualifies for a subsidy, those costs could be offset by up to $283, depending on his income.
In Contra Costa County, a 25-year-old woman who does not qualify for a subsidy would pay $150 to $204 for catastrophic coverage, and $205 to $249 for coverage with a high level of cost-sharing.
People will be able to sign up in October for coverage that begins in January. More information is available at www.CoveredCA.com.
More than 30 plans initially expressed interest in participating in the exchange, but some later dropped out and others weren't selected because their rates were too high or they didn't have an adequate network of providers, Lee said.
"We've held insurers feet to the fire," he said.
In March, an analysis for Covered California concluded that while some people's premiums could drop dramatically, especially if they get a subsidy, those who don't qualify for a subsidy could see premium hikes of 20 percent or higher.
Lee said his office could not estimate how much average premiums will change because of too many variables. Paul Markovich, president of Blue Shield of California, said Blue Shield members who purchase plans through Covered California could see an average increase of 8 to 13 percent next year.
Consumer groups split over Thursday's announcement. Groups such as Health Access California and Consumers Union applauded, saying people will now have access to affordable coverage that should meet their needs, and with standardized offerings, for the first time people will be able to easily compare plans.
Others expressed concerns that some insurers will not participate and as a result, the state's three largest plans — Kaiser, Anthem Blue Cross and Blue Shield — could dominate the market.
Consumer Watchdog said it is concerned that well-known insurers such as United Healthcare, Aetna and CIGNA will not be participating.
"When smaller companies step aside, the big three insurers gain even more power over prices," said Jamie Court, president of the group. "There needs to be a check and balance on the three health insurance companies that control 80 percent of the market, and that is requiring that their premium hikes be justified."
But in addition to the major providers, regional plans will also be available such as Alameda Alliance for Health, Contra Costa Health Plan, Valley Health Plan in Santa Clara County and Chinese Community Health Plan in San Mateo and San Francisco counties.
Many of the insurers will offer coverage only in certain regions of the state. As a result, people in the Bay Area will generally have a choice of four to six plans.
Benicia resident Curt Heimbach is among those who are eagerly awaiting more details about plans and premium prices. He and his wife pay $1,000 a month for coverage that includes a $3,000 deductible.
"That was really a struggle last year," he said. "I'm hoping to save some money, but I don't know if it's going to work."
As a self-employed woodworker, Heimbach said he has little choice except to pay what he considers a hefty price for coverage.
"I've got to have something," he said. "I work with machinery. If something would happen, I'd be in a world of hurt without anything."
Sandy Kleffman covers health. Contact her at 510-293-2478. Follow her at Twitter.com/skleffman.