California was the first state in the nation to enact legislation creating a health benefit exchange under federal health care reform. Enabling legislation can be found here: Chapter 655, Statutes of 2010 (Perez) and Chapter 659, Statutes of 2010 (Alquist).
Starting in 2014, the California Health Benefit Exchange will make it easier for individuals and small businesses to compare plans and buy health insurance on the private market.
The Exchange will enhance competition and provide the same advantages available to large employer groups by organizing the private insurance market, including a more stable risk pool, greater purchasing power, more competition among insurers and detailed information regarding about the price, quality and service of health coverage.
The Exchange will support consumer choice by making comprehensive information about health plans available in an objective, easy-to-understand format, including:
- a website that provides standardized comparison information on qualified health plan benefit plans/options
- a calculator for applicants to compare costs across plan options
- a web-based eligibility portal to help link individuals to health coverage options available to them
- a toll-free consumer assistance hotline
Individuals and small employers meeting federal citizenship requirements may enroll in the exchange. Federal health care reform makes tax credits and subsidies available in 2014 to Californians with incomes between 133 and 400 percent of the federal poverty level (in 2010, approximately $29,000 to $88,000 for a family of four). The Exchange will ensure that Californians eligible for federally-authorized tax credits and subsidies get those benefits. Small employers with less than 50 employees may also purchase coverage through the exchange.
The federal government awarded California $1 million to fund preliminary planning efforts related to the development of an exchange. On August 12, 2011, the California Health Benefit Exchange received a $39 million Level I Exchange Establishment grant that will help the state plan for and design the Exchange and will be used to recruit necessary technical and support staff and to contract for specific subject matter experts. After 2014, the Exchange must be self-supporting from fees paid by health plans and insurers participating in the Exchange.
Voluntary Health Plan and Insurer Participation
Health insurance products offered through the Exchange must be available in the same form to consumers purchasing coverage outside the Exchange. All health plans and insurers participating in the Exchange must offer all Exchange plans at the federally designated bronze, silver, gold and platinum levels. Catastrophic plans will only be available through health plans and insurers participating in the Exchange. The catastrophic plans will be available both inside and outside the Exchange from these health plans and insurers.
The Exchange is an independent public entity within state government with a five-member board appointed by the Governor and the Legislature.
Two members are appointed by the Governor; one by Senate Rules Committee; and one by Speaker of the Assembly. The Secretary of the Health and Human Services Agency or another designee will serve as an ex-officio voting member of the Board. Appointed members will serve four year terms.
- Members of the board or of the staff of the Exchange are subject to strict conflict-of-interest provisions. They may not be employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a carrier or other insurer, an agent or broker, a health care provider, or a health care facility or health clinic.
The Exchange does not change how existing state health care coverage programs are administered.
Medi-Cal and the Healthy Families Program will continue to be administered by the Department of Health Care Services (DHCS) and the Managed Risk Medical Insurance Board (MRMIB), respectively.
- The Exchange will screen for and enroll individuals in Medi-Cal or the Healthy Families Program if they are eligible for those programs. The federal law requires state exchanges to perform this function.
- The Exchange will coordinate with DHCS, the MRMIB, and California counties to ensure that individuals are seamlessly transitioned between coverage programs if their eligibility changes.