While the Affordable Care Act’s Health Insurance Marketplace provides great options for those in pursuit of health care, the ability to negotiate premiums is a missing key component. However, thanks to Covered California, California’s health insurance marketplace, residents are able to obtain health care at a discounted rate thanks to the bargaining power of the state’s exchange.
An target=”_blank”>analysis posted by target=”_blank”>HealthAffairs.org compared the various markets from state to state with regard to the ACA’s Health Insurance Marketplace premiums. For many states, the norm is to merely accept the premiums offered by participating health care providers within the Marketplace. And in areas where there is low competition, providers have the ability to raise premiums, as there are few options as contenders.
Covered California has taken the initiative to negotiate with providers, finding ways to manage health care costs. It is what’s referred to as “active purchaser,” where Covered California takes the approach to speak with the health care insurers and find ways to reduce the costs on behalf of the insured.
Part of the research leaned on a comparative analysis of New York and California between 2014 and 2015, where both states saw higher premiums in the face of lower hospital competition. However, thanks to Covered California, even in areas where there is less competition with providers, the premiums didn’t see huge spikes. New York saw premium rates grow in most situations.
California’s approach is certainly one that other states should copy. The proposed plans provide equal benefits—yet the differences between networks, doctors and hospitals are explicitly shown. The consumer is no longer left in the dark, rather they are informed about their plans, with a marketplace that seeks to regulate cost spikes for their health care. While the power of persuasion works in every other facet business, why not health care? California may very well be setting a standard for other states in the future.
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