California, with a state government as vast and complex as many developed nations, is posed to take on a new role as the blueprint for a new distribution mechanism for health insurance. It is all part of the sweeping federal healthcare reform package signed into law earlier this year.
One of the many mandates in the reform called for the creation of a system of online portals–a virtual marketplace–that would allow healthcare consumers to find affordable coverage plans. While this initiative has been broadly described as being analogous to an Expedia or Travelocity for health insurance, it is in fact a more complex system than that, and one that places health insurance agents squarely in a battle to remain relevant to their customers.
Marian Mulkney, Director for California Healthcare Foundation describes that, "each exchange will vary from state to state, but the broad approach of the exchange is that it offers subsidy opportunities and more health insurance options at better prices for the small business owner and for individuals looking to purchase their own insurance by joining the exchange." She continues, "The exchange also provides a more organized healthcare structure."
Brian Jones, Vice President of the Southwest Region for Digital Insurance Inc. believes that the exchanges can be a valuable solution for consumers, providing them access to information in a single environment. "However, simply offering the information in electronic format isn't enough," he says. "The role of an advisor will be critical in helping consumers navigate the marketplace and make smart informed choices."
Once the Patient Protection and Affordable Care Act (PPACA) law goes into effect, each state will have to manage their exchange by creating a member board that will be responsible for selecting the insurance providers for the exchange. Or, they can ask for an exchange to be managed by the federal government.
Although the PPACA does not completely go into effect until January 2014, California has already begun the process of setting up its healthcare exchange, and state legislators have been hard at work trying to get two bills signed that would give the exchange program an official go-ahead.
The two bills for California's Health Benefit Exchange are the SB 900 and AB 1602. SB 900 describes what the exchange does–namely, making available health plans to individuals and to employers. AB 1602, known as the companion bill, is the regulatory aspect of the exchange. Both bills have been approved by the California legislature and are waiting for a signature from Gov. Schwarzenegger. If signed, California will be the first state to have an exchange created under the PPACA.
