4 keys to Covered California's exchange success
As states turn their full attention back to running their health insurance marketplaces in the wake of the King v. Burwell, they may do well to look to California for inspiration.
The state's exchange, Covered California, has enrolled 1.3 million residents since it launched. And 77 percent of individual enrollees pay less than $150 on monthly premiums.
"There are four elements of success ... to running an exchange," Covered California's Executive Director Peter Lee told the audience at an Alliance for Health Reform briefing on Capitol Hill this week.
"The state has to be an active purchaser, needs to reach consumers [and] be able to offer both affordable products and the right care at the right time."
California has 19 rating regions with three to six health plans operating in each region. For states to be an active purchaser, they must closely examine each plan in its entirety to determine if it will meet consumers' financial and quality needs.
Insurers aren't free to enter exchanges as they please, Lee said earlier this year, when the board of Covererd California rejected a bid from UnitedHealth to sell plans on the state exchange in 2016.
"We do turn plans away," Lee said at yesterday's event. "They need to show us good prices and the right networks."
Other states must do a better job of active purchasing, Lee said.
"If certain health plans proposed a 25 percent rate hike for next year, that means they blew it the previous year with their rates," he said, adding that large rate hikes don't necessarily mean a bad risk pool, but rather bad underwriting by plans.
Insurers play a big role in the equation, Lee noted. "We ask our insurers: 'What are you doing to reach out to your contracted providers?'" It's the insurer's job to know its network because provider network drives consumer choice.
Another key to Covered California's enrollment success is its strong consumer outreach. Last year, the state's exchange launched a humerous ad campaign that included celebrities holding "get covered" signs.
Covered California asks its health plans what tools they provide consumers to help them make more informed decisions. Ultimately, consumers need to understand benefit design. And "thanks to the Affordable Care Act, states will do outreach forever," Lee said.
To learn more:
Supreme Court upholds ACA's federal subsidies 6-3
California exchange rejects UnitedHealth
California ad campaign aims to make reform funny
Covered California latest state exchange to face financial uncertainty
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