State reveals benefit designs for exchange participation

California continues to lead the nation in its health reform efforts, this time becoming the first state to announce the standard benefits design that insurers must offer when they sell plans on the state's health insurance exchange.

Officials with the state-run marketplace, Covered California, revealed costs for annual deductibles, out-of-pocket costs for doctor and hospital visits, plus co-payments for prescription drugs, the Associated Press reported.

The amounts for each category vary depending on which level of coverage--bronze, silver, gold or platinum--that consumers purchase. For the most expensive policy, the platinum option, insurers must pay 90 percent of costs, whereas the least expensive bronze policy requires insurers to cover 60 percent of costs, reported The San Francisco Chronicle.

The new standards add transparency to the state's insurance industry, The Sacramento Bee reported. "We're changing the focus of health insurance from being a shell game--hiding from consumers what's covered and what's not covered--to being about health insurance providing the best care possible, to help people stay healthy, get care when they need it and lower costs," Covered California Executive Director Peter Lee said Wednesday during a press conference.

He added that insurers have responded well to the new standards. "They are ready to play by the rules," Lee said. "They are ready to embrace the opportunity to compete not based on a shell game of hidden benefits but based on quality and value."

However, the California Health Plans Association said it's too soon to know how the benefit designs will affect premiums, the AP noted. "By requiring the same benefits and deductibles for each category of coverage, Covered California may reduce confusion among consumers about the differences in pricing among plans but may also increase premiums," CEO Patrick Johnston said in a statement.

To learn more:
- read the San Francisco Chronicle article
- see the Associated Press article
- check out the Sacramento Bee article