Is time running out for your health insurance plan?
If you could write your own contract with your health insurance company what would it look like? What provisions would you include to protect your privacy, enhance customer service, or guarantee a good network of doctors? Would the contract cancel your current insurance?
Covered California model contract
California’s health insurance exchange, Covered California, has been wrestling to come up with a model contract for over a year. On a webinar held on April 30th, staff at Covered California gave high level over view of the contract they will be forwarding to their Board of Directors for approval in May.
California’s unique purchasing
Covered California will be an active purchaser of health insurance on behalf of Californian’s that participate in the exchange. In other words, Covered California will contract with a variety of different health insurance companies and then offer those plans to individuals, families and small business through the exchange. Covered California will collect the health insurance premiums and then remit them to the carriers.
Consumer friendly teeth
This unique arrangement of actually purchasing the health insurance for consumers allows Covered California to put some real consumer friendly teeth in the contract. The model contract between health insurance companies that want to sell through the exchange and Covered California has been laboriously negotiated with a variety interested parties such as consumer advocates, carriers, and physician groups adding their input.
A new playing field for insurance
While the model contract may sound fairly mundane and arcane, it actually sheds additional light on how dramatically the market place will be changed under health care reform in California. In the interest of creating a “level playing field” for insurers and consumers there is one potentially contentious item in the model contract; the termination of all non-grandfathered individual health insurance plans.
Terminating older health plans
For health insurance companies that wish to sell plans through Covered California, the model contract calls for them to terminate existing plans that aren’t compliant with provisions of the Affordable Care Act plans offered through a state exchange by March 31, 2014. These plans were generally created after the ACA was signed into law and are not subject to the “grandfather” provision. Health insurance companies that wish to contract with Covered California must agree to transition members into new plans that will look substantially like those being offered through the exchange.
Cheaper alternatives?
An insurance company that is not selling its products to Covered California for distribution through the exchange is under no obligation to terminate any plans. There may be carriers that will offer plans that will meet all the guidelines of the ACA, but not necessarily the benefit levels mandated by plans sold through the state exchange.
Triple Aim for Covered California
Beyond what some folks will classify as unnecessary government meddling in the market place by mandating the termination of some health insurance plans, the model contract reads like a consumer advocate manifesto.
Article 1. Organization; Relationship of the Parties
1.01 Purpose. The Agreement is intended to further the mission of the Exchange to increase the number of insured Californians, improve health care quality and access to care, promote health, lower costs, and reduce health disparities. The Exchange seeks to accomplish its mission by creating an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that offer the best value. The Exchange’s “triple aim” framework seeks to improve the patient care experience including quality and satisfaction, improve the health of the population, and reduce the per capita cost of health care services.
A candid information session
The webinar was less “canned” information being pushed out and more a round table discussion between staff and Executive Director Peter Lee clarifying different aspects of the contract. I almost felt as if I were eavesdropping on a staff meeting as they discussed the rational and philosophy behind different parts of the model contract.
Covered California can throw some weight around
Unlike the regulatory agencies of California Department of Managed Care and California Department of Insurance, Covered California will be able to hold the carriers to performance standards outlined in the contract. Covered California will be more like the Centers for Medicare and Medicaid that can swiftly put sanctions on a contractor of a Medicare Advantage health or prescription drug plan if they fail to meet the agreed upon levels of service.
Performance standards for health insurance!
Some of the contractual items that will help Covered California meet their triple aim of patient care, improved health, and reduce costs are certain expectations and responsibilities of the health insurance companies:
- Specific Network Requirements
- Transparency in Coverage
- Customer Service
- Compliance Programs
- Collection Practices
- Appeals and Grievances
- Conflict of Interest
- Transition Plans
- Examination and Audit Results
This little document could be really big
These are just a few of the items, above and beyond current regulations, that a consumer may have wanted to include in a contract with their health insurance company that will now be included under Covered California. From listening to the webinar and reading through the material, the model contract really focuses on performance and accountability. This one little document, signed by perhaps 20 or 30 insurers and the state, has the potential to move all of California health care, insurance and the market in a positive direction.
