California gets started on health-care reform
The states that are resisting the new health-care law are getting a lot of press lately. But on some level, that's a sideshow. The more consequential story is what's happening in the states that are implementing the new law. And here, as is often the case, California is leading the way:
Under two bills that the California legislature passed and Schwarzenegger is apparently expected to sign, the state's exchange authority would have explicit permission to “contract with carriers so as to provide health care coverage choices that offer the optimal combination of choice, value, quality, and service.” That mandate, combined with the bills' other provisions, means the exchange authority would be able to negotiate pretty aggressively over price and quality, excluding plans that don't serve consumers well. That's more or less what corporate benefit departments and the managers of public employee programs, like the Federal Employee Health Benefits Program, do for their members.
A wide array of interest groups, including consumer advocates like Health Access and nonprofit insurers like Kaiser Permanente, support the measure because they believe it will reward quality and help hold down the price of insurance--a verdict that a new market analysis from Citi seems to confirm:
“Limiting the number of companies that participate would seem give the exchange the power to negotiate more favorable terms with the plans as a basis for selection. In addition, the legislation appears to put significant focus on premium rates, with measures in place for premium rate reviews that will attempt to limit the magnitude of future rate increases.”
This, much more so than the early consumer protections, is what the beginning of health-care reform looks like.
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