California’s health system needs all the help it can get, so we should rightly be proud of our state’s leadership not just implementing but improving upon the Affordable Care Act to bring those benefits home.
In one example of our leadership, California was not just the first state in the nation to set up an exchange, or insurance marketplace under the Affordable Care Act, but was one of the few to give it the ability to actively bargain for the best price and value. Covered California has used this power not just to negotiate the competitive rates announced in the last few weeks, but to standardize benefit packages and to help consumers make apples-to-apples comparisons.
In contrast, many of the other state exchanges will simply list the products of any willing insurer — a model that for some represents the unfettered free market but can be more like a flea market, with a “let the buyer beware” ethos.
Because our exchange, Covered California, has this “active purchaser” model, it also has some of the toughest conflict-of-interest provisions in the country, prohibiting any representative of the health industry from serving on the board. If Covered California is going to negotiate, it stands that the health industry shouldn’t be on both sides of the bargaining table. That’s a marked contrast with exchanges in other states that put industry on their boards.
But the ability of Covered California to selectively contract with health plans also means it needs some ability to negotiate behind closed doors, in order to get the best outcome for consumers. This is not uncommon in other state programs that negotiate with plans, from CalPERS to Healthy Families. The key is the transparency of process and accountability of results. The AP comparison of exchanges in other states in not an apples-to-apples comparison. After all, if many of the other exchanges are simply listing insurance products like a phone book, there’s no negotiation to keep private in the first place.
That said, the AP review is a welcome opportunity to see how California can and should do better, especially on such core values as transparency and accountability. For example, there’s less rationale for the ability of the exchange to cloak in secrecy vendor contracts, with the consultants who are conducting key elements of Covered California’s work. In fact, Covered California has for some time waived its ability to keep contracts private. It is the appropriate role of the Legislature to set those parameters for the future.
There’s a balance, but consumer advocates prefer to err on the side of transparency and the accountability that comes with that. We want individuals, families, and small employers to have trust in Covered California, that they finally have someone on their side when selecting and securing health insurance. Transparency helps build the trust that is essential for the success of Covered California.
For these reasons, Health Access California supports SB 332 to further increase transparency in Covered California, while facilitating its important ability to get the best deal possible for the California consumer.