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Uncertainty Surrounds California Exchange

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As California hammers out details about its forthcoming health insurance exchange, uncertainty remains over how the exchange will affect the state's health care system, Capitol Weekly reports.


Two new state laws -- AB 1602, by Assembly Speaker John Pérez (D- Los Angeles), and SB 900, by Sen. Elaine Alquist (D- Santa Clara) -- laid the foundation for the California Health Benefit Exchange. The exchange will provide an online marketplace for health insurance coverage as required under the federal health reform law. The exchange is scheduled to launch by 2014, but state officials plan to begin initial testing and adjustments at least a year in advance. State residents who seek coverage through the exchange will be able to choose from five levels of coverage. Although each option will offer the same essential benefits package, the plans will differ in expenses and out-of-pocket costs.

Uncertainty About Exchange

Estimates for the number of residents who could receive coverage through California's exchange range from 1.25 million to 8 million. The exchange is expected to provide benefits for the state's 1.2 million beneficiaries of Medi-Cal, California's Medicaid program, as well as thousands of residents enrolled in other public health insurance programs. It is unclear how many additional residents could seek coverage through the exchange.

Experts also have expressed uncertainty about how the exchange will affect California's private health insurance market. The exchange's yet-to-be created governing board will have broad authority to set policies and negotiate agreements with health plans. Some health insurers have expressed concern that the governing board could contract selectively and wield unfair influence over the marketplace.

In addition, the Republican takeover of the House has raised questions about whether Congress will continue to provide federal support for state-based health insurance exchanges. Many GOP candidates who won congressional seats have pledged to dismantle elements of the health reform law (Howard, Capitol Weekly, 11/24).

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