Covered California to cut co-pays, end deductibles on some health plans [The Sacramento Bee]

Sacramento Bee (CA)

More than 600,000 Californians will be able to go for surgery at a hospital without paying a deductible under new health plans that Covered California will offer in this fall’s open enrollment.

Typically, consumers must pay higher premiums to eliminate their deductibles, but Covered California Executive Director Jessica Altman said that monthly premiums will remain low — as little as $0 to $10 for many — for people eligible for these plans.

The cost savings don’t end there. The agency also is lowering the cost of generic drugs and reducing co-pays on primary care, emergency and specialist visits.

“This is huge. ... Many low-income Californians were going to see their hospital deductibles rise to nearly $5,500, and now those will be eliminated,” said Diana Douglas, the policy and legislative Director for Health Access California. “These new benefits will provide real relief to many in Covered California plans who are struggling to afford their health care costs. This action means more Californians will be able to access care and not be hit with a huge bill.”

Just under half of all Americans who have health insurance worry about whether they’ll be able to pay their deductibles, according to a March 2022 poll by Kaiser Family Foundation.

To qualify for plans offering these new cost savings, Californians must earn incomes that are at or below 250% of the federal poverty level. That includes, for instance, individuals who earn $33,975 or less and families of four with household incomes of $69,375 or less.

Right now, consumers seeking insurance on the Covered California marketplace can only eliminate their deductible if they buy a pricey gold- or platinum-level plan, but Altman said that this new cost-sharing plan will give roughly 40% of Covered California members a chance to buy a low-cost silver-tier plan that has a gold- or platinum-tier value.

To fund these expanded benefits, Covered California is using $82.5 million of the money raised from the individual mandate penalties that Californians must pay if they don’t have health insurance. Assembly Bill 1208, authored by Chatsworth Democrat Pilar Schiavo, brought attention to this issue, and the Legislature moved as part of the budget deal to ensure that a greater portion of funds raised from the penalty would be used to lower the cost of health coverage for Californians.

In advocating for the appropriation, Schiavo said Californians shouldn’t be stuck paying for health care they can’t afford to use.

Altman said that, when the new cost-sharing reductions go into effect, Covered California will automatically move about 35,000 enrollees from other metal tier plans into the silver-tier plans if they will receive more generous benefits at the same or lower monthly cost. They will send out letters to explain the move.

“Recognizing that cost is still the key barrier to proper health care for too many Californians, our goal is to improve affordability for our enrollees in every aspect of their health care,” Altman said. “Combined with federal support for premiums under the Inflation Reduction Act, this will be the highest level of affordability support that has ever been available to our enrollees.”