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Overview of California's Individual Health Insurance Market

This overview provides insights into the current state of California's individual health insurance market, including low consumer participation, coverage denials based on health history, high premiums, and difficulty in making informed choices. It also discusses the ACA's coverage framework for 2014 and beyond, highlighting the potential for expanded coverage and improved consumer security. However, underlying care costs, higher premiums for younger individuals, and adverse risk selection pose challenges to achieving this vision.

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Overview of California's Individual Health Insurance Market

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  1. Marian Mulkey, MPH, MPPDirector, Health Reform and Public ProgramsFebruary 20, 2013 Overview of California’s Individual Health Insurance Market

  2. The Individual Market Today • Full cost for less coverage means consumer participation is low • Insurance carriers may deny coverage altogether, or rate up, based on health history • To keep premiums within reach, consumers often choose thinner benefits or higher cost-sharing • Wide array of products makes it hard to exercise informed choice • High risk pools offer an important backstop for some, but have limitations

  3. * Actuarial value is an estimate of the average share of health care costs covered by a policy for a standard population. • Jon Gabel, Roland McDevitt, et al., Issue Brief: Financial Protection of Employer-based Insurance in California, 2009. • Ken Jacobs, Laurel Tan, et al., How Would Health Care Reforms Change the Spending of California Families Without an Employer Plan?, December 2009. • From the CHCF Publication, California’s Individual and Small Group Markets on the Eve of Reform, 2011

  4. From the CHCF Publication, California’s Individual and Small Group Markets on the Eve of Reform, 2011

  5. The ACA’s 2014 Coverage Framework Medicaid (Medi-Cal in California) expansion Insurance market reforms New individual responsibilities New employer responsibilities Establishment of state insurance exchanges

  6. The Individual Market Vision, 2014 and beyond As many as 2 million more Californians will be covered Coverage will be more comprehensive Products will be easier to compare Consumers will be more secure

  7. The Vision Isn’t Assured • Underlying costs of care will drive premiums up, which could lead to lower participation • Premiums for younger people will be relatively higher • Adverse risk selection will remain a threat

  8. Source: CHCF/ RAND analysis of three largest carriers in California’s individual market, reported in the CHCF publication Snapshot: Individual Health Insurance Market, 2005

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