Reprinted from INSIDE HEALTH INSURANCE EXCHANGES, a hard-hitting newsletter with news and strategic insights on the development and operation of federal, state and private exchanges.
By Steve Davis, Managing Editor
June 6, 2013 Volume 3 Issue 9
Covered California on May 23 said 13 health insurance carriers will offer health coverage through the state’s insurance exchange beginning in October. The insurers represent a mix of regional and national, for-profit and not-for-profit companies that will offer plans statewide or regionally. Rates are expected to be finalized in July.
Some industry observers had predicted an across-the-board rate hike of about 30% in California. But according to a prepared statement from the state’s insurance exchange, rates submitted for the individual market ranged from 2% above to 29% below the 2013 average premiums for small employer plans in California’s most populous regions. Peter Lee, Covered California’s executive director, declared the proposed rates “a home run for consumers.”
But that home-run ball might actually have ventured into foul-ball territory, says industry consultant Robert Laszewski. In a May 31 blog posting, he notes that there does appear to be a “pretty good case of rate shock” in California. At first glance, the proposed 2014 rates don’t seem much different than those of 2013, despite being required to have generally richer benefits. But below the surface are narrow provider networks, which will translate to fewer care choices for potential applicants.
Blue Shield of California proposed an average 13% rate increase for individual coverage under the new law. But Laszewski notes that the product Blue Shield intends to offer to people in Los Angeles, for example, doesn’t include UCLA Medical Center or Cedars Sinai in its provider network. “In fact, [Blue] Shield’s exchange network includes a total of only 24,000 physicians compared to 66,000 doctors in their full PPO network,” he wrote. Blue Shield is offering the narrow network product only in the exchange.
Health plans slated to participate in California’s exchange include Blue Shield of California, WellPoint, Inc. subsidiary Anthem Blue Cross of California, Chinese Community Health Plan, Health Net, Inc., Kaiser Permanente and L.A. Care. Residents in less populated counties might have access to options from just three carriers, while at least six carriers will sell coverage in urban areas.
Several large national carriers, such as UnitedHealth Group, Aetna Inc. and Cigna Corp., opted not to participate in the state’s exchange. Consumer Watchdog warned that the lack of competition from big carriers could drive coverage costs higher.
Maryland and D.C. Name Participants
On May 28, the Maryland Health Benefit Exchange (MHBE) named 13 insurance carriers that have applied to sell health insurance or stand-alone dental coverage through the exchange. Participants include Aetna, Blues plan operator CareFirst of Maryland, Inc., UnitedHealthcare, Kaiser and Evergreen Health Cooperative Inc. More than 700,000 people in Maryland are uninsured.
After the Maryland Insurance Administration reviews rates and makes determinations in July, insurance companies will submit approved plans to the Maryland Health Benefit Exchange for certification.
Maryland-based CareFirst, which is the largest carrier in nearby Washington, D.C., came under fire recently for scaling back the number of plans it intends to offer on the District’s insurance exchange, The Washington Post reported June 4. In a filing last month, CareFirst indicated that it would offer 63 options to the small-group market through Washington, D.C.’s exchange. But in a filing issued May 31, the Blues plan operator said one of its subsidiaries would offer four exchange-based options, but would make another 31 plans available off of the exchange. Another subsidiary would offer four more exchange-based plans and 15 options outside of it.
Visit Covered California at www.coveredca.com and the Maryland Health Benefit Exchange at http://marylandhbe.com.
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