Counties Weigh Public Plan as Option in State Health Benefit Exchange
Orange County officials have ruled out offering a public plan option as part of California's health insurance exchange, HealthyCal reports.
Other counties, including Santa Barbara and San Francisco, are deciding whether they will offer public options in the exchange (Afrasiabi, HealthyCal, 10/10).
Two state laws (AB 1602, SB 900) laid the foundation for the California Health Benefit Exchange, which will provide an online marketplace for health insurance coverage as required under the federal health reform law.
The exchange is scheduled to launch by 2014, but state officials plan to begin initial testing and adjustments at least a year in advance (California Healthline, 11/29/10).
Orange County Rules Out Public Option
Under AB 1602, counties could let public health plans join the exchange.
For example, CalOptima -- the program that administers Medi-Cal in Orange County -- would be able to sell insurance commercially on the open market to residents not eligible for Medi-Cal. Medi-Cal is California's Medicaid program.
However, the county Board of Supervisors in MayÂ voted unanimously against offering a public option.
The board said that because Orange County has no publicly funded hospitals, a public health plan would be inappropriate for the county. In addition, county Supervisor Patricia Bates said such an option could lower reimbursement rates.
Julie Puentes, regional vice president of the Hospital Association of Southern California, said an expected influx of Medi-Cal beneficiaries under the federal health reform law could further complicate the issue. She said Orange County is expected to gain 145,000 additional Medi-Cal beneficiaries.
According to Puentes, Orange County hospital reimbursements could be weakened further by allowing a public plan to compete with private insurers by offering low-cost policies in addition to the services already provided for indigent patients.
However, Anthony Wright, executive director of the consumer advocacy group Health Access, said the additional Medi-Cal beneficiaries will be people who previously were uninsured, meaning hospitals and physicians will receive more money for treating them, not less.
Bob Freeman -- CEO of CenCal Health, Santa Barbara County's publicly funded health plan -- said the theory that reimbursements will be lower with public health plans participating in the state exchange is a "misconception." He noted that hospitals can negotiate reimbursement rates (HealthyCal, 10/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.