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California Youth Catastrophic Exchange Plan

RAF and California group health insurance Lowest priced Exchange plan on the market (benefit link below)
Risk Adjustment Factor in California insurance market Subsidies are not available on the Catastrophic Young plan, only the Silver Exchange (detail below)
California RAF for Small Group Age requirements to qualify for Catastrophic plan (detail below)
RAF affects group health insurance rates by up to 20% Quote the Young Catastrophic Exchange Plan starting Oct 1st, 2013 for a Jan 1st, 2014 effective date (detail below)

We're huge fans of practicality and the Catastrophic Exchange Plan for Young Californians is a step in the right direction.  There will already be pressure on this critical group due to rate compression (we'll discuss below) and if any group needs to sign up for this whole Health Reform system to work, it's the young and healthy!  Let's take a look at the Catastrophic Exchange plan in California in terms of benefits and importance to the system in general.

Core Benefits for Catastrophic Health Plan for Young Californians

Deductible for Catastrophic Young Health Plan

The deductible on this plan will be the highest on the market and it's much more inclusive than the other Exchange plans.  It has a $6400 deductible/max out of pocket combined for both medical and RX benefits.  This essentially means that you will pay the negotiated rates until you hit the $6400 and then the carrier will take over at 100% for covered benefits, in-network.  There are four areas that are broken out separately and give you benefits before the deductible needs to be reached.

1.     Preventative Benefits.   Preventative benefits will be covered at 100% right away in-network.

2.  First three non-preventative office visits.   You have no cost sharing (in-network) for your first 3 office visits before deductible

3.  First three urgent care visits.  You have no cost sharing (in-network) for your first 3 urgent care visits before deductible

4.  Hospice Care.  You have no cost sharing for hospice care.

It's a pretty clean design and we applaud the benefits.  Our gut says that this plan will need to be rolled out to the rest of the age bands who do not receive subsidies.  It combines a high deductible (wish generic RX was broken out) with items that the young people actually use more regularly (office visit and urgent care).  Who is eligible to apply for this plan?

Age requirement for Catastrophic Exchange plan in California

In order to apply and enroll in the Catastrophic plan, you must be under age 30.  This plan was created to make sure the coveted young Californians have a low-priced options to apply for.  The Federal law establishes a 31 to 1 age band which means that the oldest person should not pay more than 3 times what the youngest person pays.  The current compression is 5 to 1.  This means that younger people (say under age 45) will have their rates go up much more than older clients.  Essentially, the young are subsidizing health insurance costs for older Californians (till age 65).  A good third of the uninsured that the law is going after are the young (also called the young invincibles) who tend to be healthier on average.    For the entire project to work, the marketplace needs a large number of these people to enroll.  Keep in mind that those with significant health issues or histories will definitely enroll.  For every one high risk enrollee, we need 100's if not 1000's of good to average risk enrollees and that is where the rubber meets the road for the entire project to work.  Will a 25 year old male view the subsidies (if available) and the penalty as persuasive enough.  The catastrophic health plan is California's enticement for this much needed demographic group.

Catastrophic Young Exchange Plan Benefit Summary

NEW!  California Health Subsidy Calculator  (until we have exact rates October 1st, 2013)

Popular Related Articles:

Health Exchange Plan Benefit Summaries
Why the Silver Plan Matters
Expected Rate Shock for health rates in California
Penalties for not purchasing California health insurance
Subsidies to help buy California health coverage
Introduction to the California health exchange





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