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Healthcare by Design: Consumer-Centric Benefits for California’s Individual Market

For consumers buying a health plan on their own, the journey to find the best plan for their needs can be a frustrating and challenging one. Nothing is more bewildering to consumers than cost-sharing features—figuring out how to compare plans with varying premiums, deductibles, copays and coinsurance.

The Affordable Care Act established a framework for putting consumers in the driver’s seat when choosing coverage by encouraging health plans to compete not on risk selection, but on more consumer-centric ends such as price and quality—in short, on value. The requirement that plans offer ten “essential health benefits,” for example, created some comparability among individual market plans. These ACA parameters, however, went only so far. The ACA neither required that products be simplified nor limited the number of products that health carriers could offer, but offered a good deal of state flexibility to offer greater protections.

Some states, such as California,  have created such protections. That state took a number of steps to ease consumers’ ability to compare plans and make access to valuable medical care easier. Key among them is the decision by California’s Exchange, Covered California, to create consumer-friendly cost-sharing designs to allow consumers to make apples-to-apples plan comparisons.  A new paper by Consumers Union describes the iterative process by which Covered California created these standardized plans with input from consumer groups and all stakeholders; the features of these products; and the coverage, cost, and market stability outcomes they have produced. Finally, it offers implications for other states and for federal decision-makers.