What are the changes in Covered California 2023?

Covered California, the health insurance marketplace in California, has announced several changes for 2023. These changes aim to provide more affordable and accessible health coverage options for Californians. Here is an overview of the key updates:

Expanded Insurance Carrier Options

One of the biggest changes for 2023 is the expansion of insurance carrier options on Covered California. Previously, Covered California had 11 health insurance companies to choose from. For 2023, a 13th carrier has been added:

• Aetna CVS Health will begin offering coverage in several counties across California.

In addition, an existing carrier – Anthem Blue Cross – will now have statewide coverage, becoming the 2nd carrier after Blue Shield to be available statewide.

As a result, all Californians will have at least 2 carrier options to choose from. 93% of people can select plans from 3 or more carriers, and 81% will have 4 or more choices.

More competition between insurance companies is beneficial for consumers, as it encourages insurers to offer quality plans at lower premiums to attract customers. With more options to choose from, Californians can better find a plan that meets their needs and budget.

Lower Rate Increases

For 2023, Covered California has announced an average rate increase of 6% for its health plans. This preliminary weighted average increase is lower than the national average of 10% for other states.

Covered California attributes its lower rate hike to factors like:

• Active negotiations with insurance carriers to get the best deals.

• A large enrollment base of over 1.7 million people.

• A healthier consumer pool compared to other states.

While a 6% average increase is still a hike in costs, it is below national trends. On average over the past 4 years, Covered California’s rate changes have been around just 2.3% when factoring the very low increases in 2020 and 2021.

The rate changes can vary regionally across California, ranging from 0% to 11.7%. But overall, it marks a competitive increase compared to other states.

Fixes to the “Family Glitch”

One of the most impactful changes for 2023 is a fix to what has been called the “Family Glitch” in the Affordable Care Act.

The “Family Glitch” refers to an issue where employer insurance coverage was deemed “affordable” based only on the employee’s premium costs, even if family coverage was very expensive. This meant many family members were ineligible for financial subsidies on Covered California plans.

Starting in 2023, affordability will now be based on the cost for the whole family. As a result, around 400,000 more Californians will be eligible for health insurance subsidies if their employer family plans are too expensive.

This change will make Covered California plans more accessible for middle-class families who were stuck in this glitch previously.

Continued American Rescue Plan Subsidies

The American Rescue Plan Act passed in 2021 significantly expanded subsidies for health plans on Affordable Care Act marketplaces like Covered California. These increased subsidies were originally set to expire at the end of 2022.

Fortunately, the Inflation Reduction Act has now extended these enhanced subsidies through 2025. This means millions of Californians will continue to benefit from substantial financial assistance in 2023 and beyond:

• 2.4 million Californians qualify for savings, with average annual savings of $5,000 per person.

• Nearly 25% of subsidy-eligible people can get a $0 premium plan.

• Two-thirds of enrollees can get coverage for $10 or less per month.

Without the extension, many consumers would have seen doubled premiums in 2023. The continued subsidies will keep health insurance affordable amid rising inflation and economic uncertainty.

State Subsidies as Backup

In addition to the extended American Rescue Plan subsidies, California has allocated $304 million in state funding that can provide further subsidies if the federal ones were ever to expire.

While not as large as the federal subsidies, this state backup could help partially fill gaps if Congress fails to extend support in future years. It provides some reassurance that California remains committed to helping residents afford quality health coverage.

Medi-Cal Expansion for Undocumented Adults

Medi-Cal is California’s Medicaid program that provides free or low-cost health coverage for eligible low-income residents.

In 2023, Medi-Cal will expand eligibility to undocumented adults ages 50 and up with incomes up to 138% of the federal poverty level. Currently, undocumented adults under age 26 are eligible.

In 2024, coverage will further expand to undocumented adults ages 26-49. This gradual expansion aims to eventually provide Medi-Cal access to all income-eligible undocumented adults regardless of age.

Lower Drug Costs for Medicare Recipients

While not directly impacting Covered California, the Inflation Reduction Act also includes provisions that will lower prescription drug costs for many Californians enrolled in Medicare.

Key drug affordability benefits include:

• Allowing Medicare to negotiate drug prices for some high-cost medications.

• Capping insulin co-pays at $35 per month for Medicare enrollees.

These changes will provide relief to millions of seniors and Medicare recipients struggling with expensive prescription medications.

More Time to Enroll After Life Changes

Previously, special enrollment periods after qualifying life events like job loss, marriage, or moving were 60 days. Now, the enrollment window has been extended to 90 days, giving Californians more time to sign up for new coverage when needs change.

Enrollment Assistance

Navigating health insurance plans and changes can be complicated. Covered California offers many ways for consumers to get help signing up or comparing options:

• Shop and Compare Tool – This online tool shows which plans are available and subsidy estimates based on income, family size, and location.

• Certified Enrollers – These trained professionals provide free localized enrollment assistance by phone or in person.

• Hotline – Call Covered California at (800) 300-1506 for enrollment support over the phone.

• Online Portal – Consumers can explore plans and enroll directly through Covered California’s website.

With all of these changes and support resources, 2023 brings more health insurance accessibility, affordability, and choice to Californians. The expanded financial help, competitive rates, and insurance carrier options create an attractive marketplace for individuals and families looking for quality, comprehensive coverage. Anyone needing health insurance should consider shopping Covered California plans this enrollment season.