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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.


SHOP Health Plan Announcement

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Question: Last month, Covered California said they would announce the health plans selected to compete in the small-employer program in early June, but that has not happened. What’s the story?

Answer: The SHOP health plan announcement of participating carriers has been delayed until late July or early August. A Covered California spokesperson cited “concern about rates” as the main issue. They don’t want rates out too soon, “because of competitive reasons”. Not exactly sure what that means, but that’s the official story.

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Given the fact that the Covered California folks have already announced that their process will not be transparent, it’s no surprise that they are not making much sense along this line.

The rates are the rates. They have to be filed with CDI for “effective rate review.” As the result of “unreasonable and excessive” rate increases, the Commissioner “recommended” that Anthem Blue Cross be excluded from the SHOP program. But he is powerless to force a rate change. As a CDI press release in April noted: “Neither California law nor the Affordable Care Act prohibits health insurers from imposing unreasonable and excessive health insurance rate increases.”

Unfortunately, thanks to inaction by our California legislature, the Commissioner still does not have authority to reject health insurance rate increases outright — like he does in almost all other lines of insurance. He only has authority to complain about them publicly as being too high.

So who’s padding legislator wallets in order to prevent this bill from passing? I don’t know, but you might want to ask State Senator Mark Leno, who inactivated the bill (AB52) in September 2011 (weeks prior to the CDI press release on Sept 20, which expected the bill to be voted on in January 2012). Nothing has been sponsored since then.

As much as I personally hate the thought of federal control over health care, CA has lost millions of dollars in federal funding thanks to the Commissioner’s inability to reject rate increases outright.

How much did Mark Leno get from “special interests” to pull that bill off the floor?

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