Covered Calif. Will Not Post Health Insurers’ Quality Ratings in 2014
Last week, California officials announced that they no longer plan to post quality ratings for insurers that offer coverage through the state's health insurance exchange, the Los Angeles Times reports (Terhune, Los Angeles Times, 8/9).
Background on Exchange
The exchange -- named Covered California -- primarily will serve individuals and small businesses.
Supporters hope that the exchange will function similarly to websites like Amazon and Expedia so that users will be able to choose among various health plans through an easily navigable online store.
The exchange is expected to open for registration in October (California Healthline, 8/5).
Details of Quality Ratings
The Affordable Care Act requires states by 2016 to provide quality information for all plans participating in their health insurance exchanges.
California previously was among several states that said they would implement a new quality rating system for health insurers this fall, two years earlier than required under the law (California Healthline, 3/4).
Details of Announcement
Peter Lee -- executive director of Covered California -- said that currently available insurer data are out of date and only cover plans that differ significantly from those that will be offered through the exchange.
He said, "These factors raise substantial concerns that the historic performance of plans may not be representative or complete enough to allow for direct comparisons between plans."
According to Lee, the exchange instead is determining strategies for quickly collecting performance data during the first year of the exchange and creating its own ratings.
He added that the marketplace might direct consumers to other locations where they can find information on insurers' performances.
Reaction From Consumer Advocates
Consumer advocates are criticizing the decision, saying they will urge the exchange board to reconsider during its Aug. 22 meeting.
Beth Capell -- a lobbyist for Health Access -- said that "it's important for consumers to have information on quality in Year 1, even if it's not everything we want."
She added, "If for five bucks more a month I can get a 4-star plan instead of a 2-star plan, I should have that information."
Advocates and health policy experts said that it could take up to two years for the exchange to develop its own rating system, while lower-performing insurers benefit from the lack of ratings.
Reaction From Insurers
Higher-performing insurance companies also criticized the decision.
In a letter to state officials, Kaiser Permanente, Sharp Health Plan and Western Health Advantage said the exchange should prominently display quality ratings.
They argued that officials should label plans as "not yet rated" if data are not useful for certain insurers, rather than withholding ratings for all insurers (Los Angeles Times, 8/9).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.