Increase in Competition Should Lead to Better Pricing, Quality and Service
SACRAMENTO – A recent response from health insurers indicates a strong interest in offering health plans through the California Health Benefit Exchange marketplace that will expand coverage for millions of Californians beginning in January 2014. High participation by health plans means that the Exchange can offer California consumers a wide-range of health care coverage options in every region of the state. Plans selected to be in the Exchange will be available to all Californians, over three million of whom will be eligible for federal credits making their coverage more affordable.
“The good news is that the high interest in participation from the multiple plans will lead to more competitive pricing, greater choice for the consumer, and ultimately improved quality and service,” said Peter V. Lee, Executive Director of the California Health Benefit Exchange.
The Exchange’s October 5th “Intent to Bid Notice” – which accepted comments on October 17th – resulted in submissions from 33 separate health plans and insurers, ranging from California’s largest health plans to smaller plans serving limited geographic areas. The responses were submitted confidentially, but offer a strong indication that the Exchange will be able to offer a diversity of plans and a wide variety of products including Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs).
“The significance of the broad interest in the Exchange on the part of health plans that every Californian will have multiple plans to choose from,” Lee added. “The fact that those areas where 85 percent of Californians live means that the Exchange is positioned to become an active purchaser and select plans on a competitive basis for sale in the new marketplace.”
For the most populous regions of the state, more than 10 health plans stated their interest in bidding to participate in the Exchange. For example, responses from insurers indicate as many as 13 plans may bid in the Los Angeles area, where there are about 1.8 million uninsured residents. The San Francisco Bay Area – home to slightly more than 800,000 uninsured – may have as many as 20 plans bidding, while San Diego (nearly 400,000 uninsured) could have as many as 15 plans bidding.
The Exchange’s Interim Health Plan Management Director Andrea Rosen, who is overseeing the Qualified Health Plan selection process, said the response from health plans was impressive and encouraging. “California’s plans are poised to compete on price, quality and service through the Exchange and we look forward to making the best plan selections possible for our enrollees,” said Rosen.
About the Exchange
California was the first state to create a Health Benefit Exchange following the passage of federal health care reform. It is charged with creating a new insurance marketplace in which individuals and small businesses will be able to purchase competitively priced health plans using federal tax subsidies and credits beginning in 2014.
The Exchange is overseen by a five-member board appointed by the Governor and Legislature; the California Health and Human Services Secretary serves as an ex officio voting member and is its current Chair.
For more information on Covered California including a Board meeting calendar, visit www.HealthExchange.ca.gov.
