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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Medical Costs Out of Control

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Question: We appreciate our future ability to purchase insurance via Covered California however, is there anything being considered about the out-or-control pricing generated by the pharmaceutical industry, the hospitals, and the providers?”

Answer: In the short-term, neither the ACA or the Exchange does much to affect the underlying medical costs of drugs, hospitals, and doctors. The most immediate reduction in medical costs will be due to the expansion of Medi-Cal, by adding more than 1 million newly insured patients with medical reimbursements below Medicare rates. Covered California will contribute to lower healthcare costs over time by providing more transparency and competition on the health insurance side. On the provider side, the ACA supports Affordable Care Organizations (ACOs) - new models that integrate hospital and physician services to achieve greater accountability and coordination of health care. California’s health care policy wonks are working to track the development of integrated approaches to the delivery of care and financing, to determine how ACOs would work in the public sector as well as the private health care marketplace.

For more on this topic read our commentary, Why Medical Costs are Killing Us

1 Comment

One of my favorite quotations I have read thus far, “Most of us agree [ObamaCare] will probably boost the insured population and you could probably give it an A. But I think it gets an F on bending the cost curve up instead of down.” -Charles Boorady, a managing director with Credit Suisse

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