Stakeholders Spar Over Power of Health Insurance Exchanges
Health insurance industry leaders and advocates are debating how much power California's forthcoming health insurance exchange should have to negotiate health plan rates, California Watch Blog reports.
The federal health reform law calls for the creation of regional health insurance exchanges to help consumers compare plans and purchase coverage.
Bills in Legislature
California lawmakers are considering two companion bills (AB 1602, SB 900) that would establish a health insurance exchange in California.
As currently written, the two bills would authorize the exchange to bargain with insurers. However, some insurance industry leaders say the exchange should offer options to consumers without negotiating rates.
Opposition to Bargaining Power
Anthem Blue Cross has suggested that providing the exchange with bargaining power could politicize the rate-setting process, which couldÂ drive insurers to withdraw from the market.
Charles Bacchi, vice president of the California Association of Health Plans, said small health insurance plans might be left out of the exchange if it has excessive negotiating power.
In addition, the Association of California Life and Health Insurance Companies said the bills might put insurers at a competitive disadvantage by compelling them to offer the same health plans within the exchange and outside the exchange.
Support for Powerful Exchanges
Anthony Wright, director of the advocacy group Health Access, said he supports an insurance exchange with strong bargaining power. He said authorizing the exchange to negotiate health plan rates would benefit consumers by curbing excessive rate hikes.
AB 1602 and SB 900 are scheduled to go before the Assembly and Senate appropriations committees, which need to approve the bills to authorize funding for staff to administer the exchange and support its website. The bills must be approved by the end of the legislative session on Aug. 31.
An adviser for Gov. Arnold Schwarzenegger (R) said the governor hopes to sign legislation to establish California's health insurance exchange before he leaves office in January (Jewett, California Watch Blog, 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.