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Austin Price,
CALPIRG

California's Health Exchange on Track to Lower Costs for Consumers

Nationwide Study of New Insurance Marketplaces Grades California a B+
For Immediate Release:

Sacramento, CA – California’s health insurance exchange has the potential to be a national leader in delivering better value for consumers, according to Making the Grade, a new report by CALPIRG Education Fund.  Health exchanges are competitive marketplaces that can empower individuals and small businesses with better, more affordable options for coverage.  Under the federal health reform law, each state will have an exchange up and running in 2014. 

“After the passage of federal reform, many states are working to create these new marketplaces,” said Austin Price, Health Care Associate CALPIRG.  “Our state can be proud of acting quickly to create a strong, pro-consumer exchange.” 

The report closely examines the exchanges that have so far been set up by states and rates them according to how accountable they will be to consumers and the public, how much they can do to lower premiums and improve the quality of care, how friendly they will be to consumers, and how stable they will be. 

“Not all exchanges are created equal,” continued Price.  “That’s why we ranked state exchanges according to the criteria that will matter most to consumers, including whether the exchange will be protected from insurance industry influence, and if it will negotiate with insurers for better rates.” 

California’s exchange earned a B+ on the report’s scorecard, making it one of the strongest of those studied: 

California’s exchange will have the power to leverage enrollee’s buying power to negotiate with insurers for higher-value, more affordable coverage. 

Because insurers and other industry representatives are barred from serving on the exchange board, it will be more accountable to the public and to consumers. 

Consumers will have an easier time shopping for coverage because the exchange will offer easy-to-use tools and comparisons between plans. 

“Our state’s made a good start in creating a strong, pro-consumer exchange,” concluded Price.  “Our leaders need to keep moving full-steam ahead so we can truly be a national leader.” 

Paul Martin and his wife Patti, who live in Sonoma County, illustrate why getting the new exchange right in the individual market is so essential.  When they first bought their health insurance plans four years ago, the cost was $4,932 per year.  Their current premium of more than $9,700 is an increase of 81% for Patti and 129% for Paul, and that is just for catastrophic insurance. 

“Trying to buy coverage on my own the cards have always been stacked against me.” said Martin.  “A strong exchange can get me, better more affordable health care choices.” 

The new state exchanges will also play a critical role in delivering affordable, quality coverage options for small businesses and their employees. 

“The most important component of healthcare reform for small businesses is the SHOP exchange.  If done right, it will lower the high cost of insurance premiums and reduce the administrative costs that are so often the driving fore behind skyrocketing rates for small group plans, “ said John Arensmeyer founder and CEO of Small Business Majority.  

“We’re pleased with the progress California has made so far in creating the exchange, but it’s crucial we continue building on the work that’s already been done to ensure it is successful and small businesses reap the benefits it can provide.”

 

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The California Public Interest Research Group  Education Fund (CALPIRG) is a result-oriented public interest group that protects consumers, encourages a fair sustainable economy, and fosters responsive democratic governance.

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