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Exchange unveils cost-sharing design



January 10, 2013
Area(s) of Interest: Health Care Reform Advocacy 

Covered California, the state’s health benefit exchange, has unveiled its proposed standardized cost-sharing structures in light of the federal government’s release of the actuarial value calculator, and already, stakeholders are noting that expected copays are beyond what many call “affordable.”



The actuarial value calculator, which was released via webinar earlier this month, includes expected deductible, coinsurance and copay amounts for the four tiered plans, breaking down these amounts by several different medical procedures settings.


Upon first inspection, the costs being passed on to consumers look steep.


For enrollees in one of the exchange’s copay-based “platinum” plans, the top tier of coverage, inpatient hospital visits would cost an estimated $300 per day and be capped at the first three days. For enrollees in the bronze level, the same stay would cost $1,200 per day.


Given that most lower income enrollees in the exchange would likely opt for a “bronze” level plan, these high copays could be damaging to the Patient Protection and Affordable Care Act’s (ACA) aim of providing all Americans with “affordable” health coverage.


Concerns, however, aren’t limited to just the consumers.


Providers also might raise issue with some of the exchange’s early billing numbers, particularly those that don’t follow the standard billing practices seen in today’s industry.


For example, the proposed design fails to divide the cost of in-patient hospital services between the physician/surgeon providing the service and the hospital playing host to the procedure. Aspects such as these will need to be fully clarified if the exchange’s proposed design is to move forward.


Additionally, many physician groups practicing under a delegated risk contract are concerned about their ability to administer caps on patients’ out-of-pocket costs and deductibles in real time. The technology needed to monitor such patient cost-sharing is a significant investment, and many groups are still not sold on the idea that there will be a sufficient number of exchange enrollees to justify the investment.


The California Medical Association will continue to keep readers up to date on cost sharing designs, and any developments that may occur.

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