California is reinforcing its commitment to accessible and affordable healthcare by enhancing Health Care Cost Sharing Programs within Covered California, the state’s health insurance marketplace. These improvements, approved by Covered California’s Board of Directors, will significantly lower out-of-pocket expenses for over 600,000 enrollees starting in 2024. This initiative builds upon the foundation of the Affordable Care Act (ACA) and aims to reduce financial barriers to necessary medical care for eligible Californians.
This commitment is further supported by new state funding. Governor Gavin Newsom and the state Legislature have allocated $82.5 million from the Health Care Affordability Reserve Fund (HCARF) to bolster these health care cost sharing programs for the 2024 coverage year. This funding is projected to increase to $165 million in 2025, demonstrating a sustained investment in making health coverage more affordable.
How Enhanced Cost Sharing Programs Reduce Your Health Care Costs
The Affordable Care Act already mandates that health plans reduce cost-sharing – the expenses consumers pay out-of-pocket for services – for individuals and families with incomes at or below 250% of the federal poverty level. These savings are typically accessed through Cost-Sharing Reduction (CSR) plans offered at the Silver plan level.
California’s new program significantly strengthens these Silver CSR plans, making them even more beneficial. The enhancements elevate the Silver 73 plan to provide coverage comparable to a Gold plan, and the Silver 87 plan to approximate the richer benefits of a Platinum plan. The Silver 94 plan already offered exceptional, Platinum-level coverage and will also see these improvements. Approximately 40% of Covered California’s 1.6 million enrollees are expected to qualify for these enhanced health care cost sharing programs.
A key feature of these enhanced plans is the complete elimination of deductibles across all three Silver CSR levels. Deductibles, the amount consumers pay out-of-pocket before insurance begins to pay, can be a significant barrier to accessing care. Removing them simplifies plan selection and ensures immediate access to health services without a hefty upfront cost. Beyond deductibles, the enhanced programs also reduce costs for various healthcare services, including generic drugs, primary care visits, emergency room care, and specialist consultations. Maximum out-of-pocket costs will also be lowered, providing further financial protection against high medical bills.
Table 1: Enhanced California Cost Sharing Reduction (CSR) Plans for 2024
| Benefit | Silver 73 Standard CSR Plan | Silver 73 Enhanced CA CSR | Silver 87 Standard CSR Plan | Silver 87 Enhanced CA CSR | Silver 94 Standard CSR Plan | Silver 94 Enhanced CA CSR |
|---|---|---|---|---|---|---|
| Medical Deductible | $5,400 | $0 | $800 | $0 | $75 | $0 |
| ED Facility Fee | $450 | $350 | $150 | $150 | $50 | $50 |
| Primary Care Visit | $50 | $35 | $15 | $15 | $5 | $5 |
| Specialist Visit | $90 | $85 | $25 | $25 | $8 | $8 |
| Drug Deductible | $150 | $0 | $50 | $0 | $0 | $0 |
| Tier 1 (Generics) | $19 | $15 | $6 | $5 | $3 | $3 |
To maximize the reach of these health care cost sharing programs, Covered California plans to proactively assist enrollees. Approximately 35,000 current Covered California members who qualify for Silver CSR plans and are enrolled in other metal tiers will be automatically transitioned to a Silver CSR plan if it offers better benefits at the same or lower monthly premium. Furthermore, many more enrollees will have the opportunity to switch to these enhanced Silver CSR plans to take advantage of the new cost savings.
Covered California will be reaching out to eligible consumers with information on how to make plan changes. Starting in October, during the renewal period, individuals can explore their options and make adjustments online at www.coveredca.com, by phone at (800) 300-1506, or through Covered California’s network of over 11,000 enrollment partners.
Addressing Financial Barriers to Health Care Access
These enhanced health care cost sharing programs directly address the ongoing challenge of healthcare affordability. Covered California’s patient-centered benefit designs are specifically crafted to minimize financial obstacles to accessing necessary medical services.
National surveys highlight the significant burden of healthcare costs on American families. A 2022 Kaiser Family Foundation survey revealed that nearly half of insured Americans worry about affording their deductibles. Furthermore, a substantial portion of adults report delaying or forgoing needed medical treatment due to cost concerns. Specifically, one-third have skipped recommended treatments, and four in ten have delayed necessary care due to financial constraints.
By strengthening health care cost sharing programs, California is directly tackling these issues. “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,” stated Jessica Altman, Executive Director of Covered California. These state enhancements, combined with federal premium subsidies provided under the Inflation Reduction Act, represent the most robust affordability support ever offered to Covered California enrollees.
Supporting Transitions from Medi-Cal to Affordable Coverage
The timing of these enhanced health care cost sharing programs is particularly crucial as California navigates the unwinding of the federal continuous Medicaid coverage requirement related to the COVID-19 pandemic. As Medi-Cal, California’s Medicaid program, resumes its eligibility renewal process, it is estimated that millions may no longer qualify for coverage.
These enhanced health care cost sharing programs offer a vital safety net for many transitioning from Medi-Cal. Historically, over 75% of individuals who lose Medi-Cal eligibility and qualify for subsidies through Covered California have been eligible for CSR plans. While some will transition to employer-sponsored insurance or other coverage options, Covered California provides a pathway to quality, affordable health insurance for many. Crucially, Covered California plans offer comprehensive benefits similar to Medi-Cal, including preventive care, doctor visits, prescriptions, hospital care, and behavioral health services.
For many individuals transitioning from Medi-Cal, Covered California, with its strengthened health care cost sharing programs, offers access to high-quality coverage at minimal or no cost, ensuring continued access to vital healthcare services.
About Covered California
Covered California serves as the state’s health insurance marketplace, connecting Californians with affordable, high-quality health insurance plans from leading insurers. It is the only platform where eligible individuals can receive financial assistance on a sliding scale to reduce monthly premiums. Consumers can compare various plans and select the one that best suits their healthcare needs and budget. Depending on income levels, some individuals may also qualify for the low-cost or no-cost Medi-Cal program through Covered California.
As an independent entity within the state government, Covered California is dedicated to ensuring the health insurance marketplace effectively serves California consumers. It is governed by a five-member board appointed by the Governor and the Legislature. For more detailed information about Covered California and its initiatives, please visit www.CoveredCA.com.
