Health insurers line up to compete in California's exchange

[Star]

"The exchange is responsible for enrolling nearly 2 million new people in Medi-Cal, the state's Medicaid program for the poor and disabled, and helping an additional 2 million Californians purchase coverage with federal subsidies earmarked for families earning about $92,000 or less annually."​

"Industry officials say they welcome the increased competition."​

Health insurers line up to compete in California's exchange - latimes.com


By Chad Terhune, Los Angeles Times
October 31, 2012



California's health insurance exchange said more than 30 plans are expected to vie with one another for spots in the state-run marketplace opening next fall.

State officials, and those in other states, are eager to flex their purchasing power under the federal healthcare law by selecting only certain individual and small-business health plans for 19 different regions across California.
The exchange, branded Tuesday as Covered California, will negotiate with insurers for the best rates and will assist consumers and small businesses in choosing a plan by separating them into five categories based on cost and level of benefits.

"There will be a lot of competition and interest, which will enable the exchange to be an active purchaser in every region and pick the best five or six plans," said Peter Lee, executive director of the California exchange.
"The plans we will be offering in San Diego will be very different from the set of plans in Sacramento or Los Angeles," said Lee, a former Obama administration healthcare official.

Insurers who aren't chosen to be among the exchange's plans can still offer policies outside the exchange. But many people seeking coverage are expected to go through the exchange because they can get government financial and educational assistance.

The exchange's five-member board picked the Covered California name after testing several monikers with consumer focus groups. The tentative tag line is: "Your destination for affordable healthcare." Other finalists included Eureka, Ursa and Avocado.

"Covered is an action verb, and if we do our job, that's what we want to happen," said Robert Ross, an exchange board member and chief executive of the California Endowment.

Overall, Lee said, 33 insurers and other organizations have expressed a nonbinding interest in bidding for business through the exchange. As many as 13 plans may bid in the Los Angeles area, and about 20 plans have signaled interest for the San Francisco market, according to the exchange.

California's four largest insurers in the individual market — Kaiser Permanente, Anthem Blue Cross, Blue Shield of California and Health Net Inc. — have indicated interest in the exchange. Smaller insurers and large hospital systems may offer health plans in specific areas.

Officials are expected to pick the winning health plans and negotiate rates by June. Consumers will start enrolling in the exchange next October for policies taking effect in January 2014.

The exchange is responsible for enrolling nearly 2 million new people in Medi-Cal, the state's Medicaid program for the poor and disabled, and helping an additional 2 million Californians purchase coverage with federal subsidies earmarked for families earning about $92,000 or less annually.

A family of four in California earning $70,275 would have to pay about $556 a month for subsidized coverage, according to the Kaiser Family Foundation.

Industry officials say they welcome the increased competition.

"The exchange has a very complicated job selecting plans in regions," said Patrick Johnston, chief executive of the California Assn. of Health Plans. "We are working with them and we want to emphasize that affordability matters most."

The ability of the exchange to lower healthcare costs remains unclear. Experts said average premiums could rise in the exchange because the Affordable Care Act requires improved benefits, but consumers' out-of-pocket medical costs could decrease under those same changes.


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[Greenbeard]

Sure, of course they're interested.

States can choose how they want their exchanges to work. California's exchange is an active purchaser (like the Federal Employees Health Benefits Program), meaning they'll contract with the ones that offer the best stuff. More hands-off states can choose to let their exchanges take all comers, regardless of what they're offering.

Regardless of how it works, it's intended to be a competitive market and it's going to be.

 

[Political Junky]

Guess there is no lack of insurance companies who want to participate.

 

[Greenbeard]

The outgoing CEO of Kaiser Permanente talked a little about California's exchange in a recent interview. He had a particular line (in blue below) that I loved.

Q: What is the greatest challenge insurers have to face heading into 2014's full implementation of the federal health law?

A: One of the big challenges is to be attractive in the context of the new exchanges, because exchanges are going to now create an opportunity for individual consumers and for consumers within small groups to make choices between plans.

Q: California is pretty far along in their insurance exchange, right? Do you anticipate that other insurers will enter the California market once that exchange is up and rolling?

A: I sort of hope so. I think there will be some additional insurers coming in for the exchange. I think it will be good for competition. The insurers who come in are likely to be care-system oriented insurers and that's good for the market. What we need is dueling care systems and not dueling actuaries. And if the exchanges are set up right, they should be set up so that consumers can choose between care systems at the level of the individual consumer.

A major improvement over the current market.

 

[Oddball]

Well sure, the corporate jackals are going to line up at gubmint's door, as it delivers the peasants to them!

Next thing you know, you stooges will get all huffy and outraged to find a little payola going on as they jockey for position.