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Despite opposition from Republican lawmakers, the major provisions of the Affordable Care Act will go live in California on January 1st, bringing new entitlements for individuals and small businesses, but also obligations and higher premiums. By taking action in the final months of 2013, many individuals and businesses can lock in this year's lower prices for most of 2014. Others will prefer the 2014 benefits and should begin researching their options now.


On January 1st, 2014:
  • A new premium tax will be imposed on all existing and newly sold health plans, no exceptions.
  • Guaranteed Issue comes to individual plans—applicants can no longer be declined, or see their premiums raised, for pre-existing conditions. (Small Group plans have had this benefit for years.) Guaranteed Issue individual plans will be sold during an annual Open Enrollment Period; the first one begins Oct 1 for the January 1 effective date.
  • MediCal is greatly expanded, possibly assisting even those earning up to $11 or $12 per hour.
  • The Individual Mandate requires everyone to have coverage, or pay a small penalty. Those without coverage through their employer or MediCal will have to buy it.
  • Government subsidies will help individuals pay insurance premiums and out-of-pocket costs. Individuals earning up to $46,000, and families earning up to $92,000, may qualify.
  • Government subsidies go to qualifying small businesses purchasing group health insurance.
  • Subsidies only available to individuals and businesses purchasing through the California health benefits exchange, called COVERED CALIFORNIA. The State spent $940 million to establish this insurance marketplace, where familiar insurance companies compete for your business. Benefits will be standardized into four plans: Bronze, Silver, Gold, Platinum. A Bronze plan from Kaiser will have exactly the same benefits as a Bronze plan from Anthem or Blue Shield, which makes shopping less confusing. Plans differ by price and by availability of doctors and hospitals. You may access Covered California through certified insurance brokers, online, or through government Navigators. Prices are the same no matter which sales-channel you use. Plans are still available outside the exchange. Covered California opens for business on Oct 1st, selling plans for the Jan 1 effective date. The plans of Covered California will have smaller networks of doctors and hospitals than those sold outside the exchange.
  • Age-band compression: Currently, older insureds are charged far more than younger ones, but on January 1st, the disparity is capped at a 3:1 ratio.
  • New coverage mandates, age-band compression, and Guaranteed Issue will raise premiums for the new ACA-compliant plans of 2014, but the real impact is expected in 2015, after a year of experience
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We even do supplemental D coverage for medicare insured clients.

If you now have insurance, and it meets your medical needs, then you'll probably want to keep it for as long as possible.

If your plan was in existence prior to Sept 23, 2010, you may have a grandfathered plan, which will shield you, perhaps for many years, from much of the rising cost of Obamacare. Read your recent insurance documents or call your insurance company to see if your plan is grandfathered.

If you now have Small Group health insurance, when your 12-month policy-term expires, higher-priced ACA-compliant plans will replace those that are non-grandfathered. But be aware that carriers have announced a special, early open-enrollment option for December, 2013. If your next open enrollment would ordinarily be February of 2014, taking it 2 months early—Dec 2013--means locking in pre-Obamacare prices until December 2014. This would be beneficial for many, but not all, small groups. Examine this option now because there are deadlines approaching for your decision. Kaiser's is August 30th; others come soon after.

News arrives daily from the carriers. For individual subscribers: Anthem will terminate its non-grandfathered plans on January 1; subscribers will be "mapped" into the new ACA-compliant plan that most closely matches what they had. Cigna will allow non-grandfathered individual subscribers--including new ones signing up from now until the end of 2013—to take a special December, 2013, contract renewal, which freezes their plans and prices until the end of 2014. Blue Shield has not yet announced what will happen to their non-grandfathered individual plans. Aetna and United Health are leaving the individual market in California. In Small Group: Anthem and Blue Shield have no grandfathered plans in the Small Group market.

A controversial provision of the Affordable Care Act, the Employer Mandate, has been delayed until 2015. This would have required employers with 50 or more full-time workers to pay a stiff penalty in 2014 if they did not provide health coverage. (There is no mandate for businesses smaller than 50 employees.) But although Obamacare is still evolving, it will soon be here.

If you're confused or distressed by the coming changes, I recommend some "retail therapy". Do some shopping with an expert health insurance broker to see what's available for you or your business. Brokers can quote existing plans, and—starting October 1st--they can also quote the upcoming plans of 2014 (both inside and outside the Covered California marketplace). For some consumers and businesses, it will make sense to make a new purchase or a plan-change before the price increases of January 1st. For others, the Guaranteed Issue provision (for individuals) and subsidies (for all, through Covered California) will be a tremendous benefit in 2014; again, pre-sales start October 1st for the Jan 1 effective date. When you purchase through a broker, you pay nothing for their services, as they are compensated directly by the insurance carriers or by Covered California. Prices are the same whether you use a broker or buy direct.