Is the California Health Insurance Exchange Right for Me?

Yesterday we discussed how you might enroll in the California health insurance exchange when it starts accepting applications on October 1 of this year.  But is the exchange really right for you?  Why might you want to avoid Covered California this fall?

  • Your income keeps you from qualifying for a subsidy – The California health insurance exchange is the only place to receive a subsidy from the government to help pay for your monthly premiums.  If you don’t qualify for a subsidy, obviously the exchange is not an option for you.  If your projected income for 2014 exceeds 400% of the Federal Poverty Line, or about $46,000 for individuals, $65,000 for couples, and $95,000 for a family of four, you will not qualify for a subsidy through the exchange.
  • Your employer-sponsored covered keeps you from qualifying for a subsidy–  If your employer offers “affordable” coverage, you will not be eligible for a subsidy.  “Affordable” has a specific connotation in this instance, which the Kaiser Family Foundation has done a great job of summarizing here.
  • You want more choices – Inside the exchange, carriers will be offering a strictly defined list of available plans, across the Bronze, Silver, Gold and Platinum range.  Carriers will offer “mirror” plans outside the exchange. These mirror plans are exactly what they sound like- they are duplicates of the plans available through Covered California,  While some carriers will limit their off-exchange offering to these mirror plans, other carriers will offer completely different plan designs, still falling into the metal tier categories, but with different combinations of copays, coinsurance, deductibles et. all. A consumer who wants more choice may choose to go off exchange to take advantage of this wider array of options
  • You want a stronger network – When insurance carriers designed their plans to fit in the California health insurance exchange, they were told what the limits on deductibles, coinsurance and other such features were. They were told they have to offer health insurance to everyone, and that they couldn’t increase anyone’s rates due to pre-existing conditions.  This left them with only one way to control the price of premiums- altering the network.  HMO customers are used to this phenomenon, however if you’ve had a PPO most recently you may not have ever even considered your network size or composition.  Many of the exchange offerings will be tied to “limited” or “exclusive” networks that do not offer the same choice you may have now when it comes to doctors and hospitals.  In order to purchase a full network that offers the name brand hospitals and doctors you are used to, you may have to shop outside the exchange.

If you fall into any of the above categories, you can continue to purchase insurance just as you do now– privately through the carriers, using the services of an agent at no extra charge.  In fact, you’ll have an even easier experience under Obamacare.  Because all plans are now guaranteed issue, it has been estimated that your application time will average under ten minutes.  The delay between applying and being approved will be shortened from an average of 14 days to one.  While you won’t receive a subsidy, there is still a lot to like about shopping outside of the exchange.