Yesterday, California became the first state in the nation to pass the bills setting up insurance exchanges through the legislature. The exchanges would not come online until 2014, but the state now has four years to codify the rules. An excerpt:
Many aspects of the exchange are mandated under the federal law, so many features of California’s model will be included in those adopted by other states. The exchange is expected to offer insurance through a website that will provide standardized and detailed information about plans, so consumers can compare them. It will have a toll-free number, and will set up a program of live helpers, or navigators, to help explain plans to consumers.
The exchanges aren’t required to be fully up and running until January 2014, when key provisions of the new federal health law kick in, although some exchange operations may start earlier. Following federal requirements, the California exchange will sell insurance in five categories, ranging from rich “platinum”-level benefits to a plan for young people offering catastrophic coverage.
It will also link eligible Californians to federal subsidies that would help pay for their coverage, or to government programs such as Medicaid […]
The California exchange would be governed by a new board, which will be given robust authority, including the power to selectively contract with insurers to offer plans within the exchange. That provision drew opposition from some health insurers.
I didn’t know about the exchanges providing Medicaid and subsidy options to their customers. Short of auto-enroll, this is an OK option. The Governor is expected to sign the law.
Unfortunately, those exchanges are four years off, and in the meantime, California will see rates continue to skyrocket in the individual market:
California insurance regulators cleared the way Wednesday for Anthem Blue Cross to implement scaled-back rate hikes after a previous increase was canceled amid an uproar over its size.
Anthem said it intends to put the new rates — averaging 14% and as high as 20% — into effect Oct. 1 for nearly 800,000 individual California policyholders.
Regulators also allowed one of Anthem’s nonprofit competitors, Blue Shield of California, to move ahead with rate increases — averaging 19% and as high as 29% — for 250,000 individual policyholders.
You may remember that Anthem BCBS backed off a 39% rate hike after its announcement touched off a fury from politicians and indirectly pushed along the Affordable Care Act. But after the dust settles, Anthem will got at least half of what they wanted out of customers. And of course, that’s just the increase for this year. Mary Feller, a customer quoted in the article, said, “If our insurance keeps going up at this rate, we’ll lose it.”
California doesn’t have much authority – outside of insuring a fairly low 70% medical loss ratio – to stop rate hikes. But a bill in the Legislature, AB2578, would “require insurance companies to justify their rates and seek approval from the Department of Managed Health Care or Department of Insurance whenever they attempt to increase premiums, co-payments, deductibles or other charges,” according to a release from the state progressive group Courage Campaign. They are pushing people to call their representatives in the legislature to enact this bill, which should get a vote in the next two days.
UPDATE: California’s legislature did just pass a mental health parity bill which would force insurers to cover mental illness.