News And Politics

Feds say Calif. on track to operate its own health insurance marketplace

Jan. 3, 2013, 11:30 a.m.

U.S. Secretary of Health and Human Services Kathleen Sebelius announced Thursday that California was officially one of 19 states, plus Washington D.C., to be on track to operate its own affordable insurance marketplace in time for open enrollment in October. (United States Mission Geneva/Flickr Creative Commons)


The country's secretary of health announced Thursday that California is on track to run its own affordable health insurance marketplace, which will be required of all states in 2014 under the Affordable Care Act (ACA).

Secretary of Health and Human Services Kathleen Sebelius said California is one of eight states who as of today have conditional federal approval to operate a state-based affordable insurance exchange. That means the Golden State will be in full control of its insurance market, with financial support provided by the federal government. It joins 18 other states and Washington, D.C. in being conditionally approved to partially or fully run their respective marketplaces.

Under the ACA, most Americans will be required to purchase health insurance. To that end, the federal government is requiring each state to operate an exchange, which it describes as a "state-based competitive health insurance marketplace where people and small businesses can shop for and buy affordable private health insurance." An exchange isn't a private insurance company or a government-backed health plan; rather, it's supposed to be a centralized hub where folks can apply for and enroll in private or public health insurance, including Medicaid (or Medi-Cal, as it's known in California).

The Department of Health and Human Services (HHS) will fund necessary exchange costs until 2015, by which time states will be required to fully fund their own operations.

In a statement, Sebelius said she "[applauded] California's work to build a new health insurance marketplace."

"California has made significant progress, and will be ready in 10 months for open enrollment when Californians will be able to use the new marketplace to easily purchase quality health insurance plans," she said.

These exchanges, said Sebelius, will make accessing health care "less costly and less complicated than ever before" and will "usher in a brand new day."

The conditional approval means "there's more work to be done to be ready for open enrollment [through these exchanges] in October 2013," said Gary Cohen, the deputy administrator and director of the Center for Consumer Information and Insurance Oversight, at a press conference.

"States have to demonstrate that they are able to perform all the activities that are set forth in the blueprint application to operate a state based exchange," he said, adding the eight states who were approved today, including California, have demonstrated that they'll be able to do so by October.

Other states have until Feb. 15 to apply for a state partnership exchange. In this model, a state would operate some components of the exchange and HHS would operate others. Arkansas and Delaware have been conditionally approved to operate state partnership exchanges, and the Henry J. Kaiser Family Foundation reports that North Carolina and Michigan are among states planning to do the same.

In states like Alabama, Texas and Louisiana, which have declined to build an exchange, the federal government will establish and operate one for them.

States will have regular opportunities in the future to apply for state-based exchanges, with the next one coming in November, said Cohen.

One of the primary challenges of the exchange lies in its main benefit: More people will have access to health care. That means the demand for doctors will go up, but many local health providers have noted there simply aren't enough of them. The Association of American Medical Colleges estimates that by 2015, the U.S. will be short nearly 63,000 doctors; that shortage is expected to more than double by 2025.

Making sure there are enough doctors to treat South L.A. patients will be even more challenging. A lot of uninsured southside residents will gain access to health insurance when the ACA's Medicaid expansion kicks in at the beginning of 2014 – but the question of whether there will be enough doctors to treat them all still looms. There's also the question of whether providers will even want to treat them.

"There just aren't medical practices that want to service this community," said Nina Vaccaro, the executive director of the Southside Coalition of Community Health Clinics, in March. "Traditionally specialists and primary care providers don't make a lot of money off Medi-Cal."

Another local doctor says it's looking more likely that non-physician providers like nurses and physician's assistants will play a crucial role in filling the provider gap. Dr. Felix Aguilar, the president and CEO of UMMA Community Health Clinic, predicted in November that within the next 10 years, most primary care won't be provided by doctors.

"It will be provided by mid-level providers: nurse practitioners, physician assistants," he said. "That's currently the trend, but it'll be accelerated with health reform, mostly because there's just a greater need for access and that's really going to create difficulties."

Photo by United States Mission Geneva via Flickr Creative Commons.

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