"California really demonstrates that the concept of an exchange can work by really increasing head-to-head plan competition," said Caroline Pearson, vice president of Avalere Health, a Washington, D.C., data analysis firm catering to the healthcare industry and government. "It brought a lot of carriers into the market. It brought the premiums down. It was sort of the best example of the market working."
Other states running their own insurance exchanges already have announced the plans they will offer. Oregon offers 16 plans, Colorado has 10 and Washington has nine.
The White House welcomed California's options as it tries to allay fears about potential rate shocks when the Affordable Care Act takes full effect next year. The rates offered in many plans turned out to be lower than previous estimates, state officials said.
"Given that California, the largest insurance market in the nation, has robust competition and a wide range of affordable plans, that bodes very well for the marketplaces across the country," Tara McGuinness, a senior White House communications adviser, said in an email.
Exchanges will begin enrolling customers in October. Coverage begins Jan. 1, the same time virtually everyone in the country will be required to have health insurance or pay a penalty.
The exchanges offer individuals and small businesses a choice of private insurance plans similar to those already offered to workers at large companies. The intent is to provide affordable plans with an annual cap on out-of-pocket expenses and guaranteed coverage despite someone's medical condition.
An estimated 5.3 million Californians will be eligible for coverage through Covered California, the state agency running the insurance marketplace. The lowest-income people will be referred to public safety net programs, while some 2.6 million middle-income residents will qualify for federal subsidies to help pay their premiums.
Covered California provided examples of what a 40-year-old would pay depending on income and where that person lives.
A San Francisco resident earning more than $46,000 a year will be able to choose among five plans with a monthly premium ranging from $221 to $501.
Meanwhile, a 40-year-old resident in Fresno who earns about $15,400 a year will be able to pick from four plans and will be eligible for federal subsidies. That person can expect to spend between $53 and $102 on premiums each month on a middle-of-the road plan.
Peter Lee, executive director of Covered California, said the state did its best to negotiate competitive rates. But he also said it was important that the exchange made financial sense for insurers so it would attract enough plans to give customers access to a good network of doctors and hospitals.
"We want Goldilocks pricing," Lee said Thursday. "We don't want prices too high, but we also want to make sure there's enough money so patients can get the care they need."
Healthcare costs under the federal reforms have been a concern for middle-class families who do not get their insurance through an employer. Earlier this year, an actuarial report commissioned by Covered California found that middle-income residents could see individual health premiums increase by an average of 30 percent.
Lee said rates will go up for some people, but he noted they are increasing more slowly than predicted. He said a family making $60,000 a year will pay about $300 a month.
"They still need to write a check, which is a big check," Lee said. "But what we've heard again and again is that Californians want to protect their families. Californians want to have coverage that they cannot be turned down for. Californians want coverage they can rely upon if they actually get sick."
The maximum out-of-pocket cost per year for most plans will be $6,350 for an individual and $12,700 for a family. Health advocates said the new insurance plans also will be more comprehensive, making comparisons to current plans and premiums difficult.
Officials running the state's exchange divided California into 19 regions for rate-setting purposes. Aside from where a person lives, insurers are limited in their ability to charge consumers different prices for healthcare.
On average, there will be five plans to choose from in each region of the state. Rural areas will have two or three, according to Covered California.