Covered California announced that it has yanked Alameda Alliance for Health (AAH) from its health plans in the state exchange. The trigger for removal was that AAH had not been granted a material modification to its licensed from the Department of Managed Health Care to engage in commercial insurance sales for 2014. This lack of ability to sell health plans to individuals and businesses through Covered California technically puts AAH out of compliance with the contract they signed with the insurance exchange to offer health plans to the public.
Alameda Alliance for Health Medi-Cal focused
AAH was established in 1996 as a not-for-profit HMO health plan in Alameda County. Their primary business model has been offering health plans for Medi-Cal, Medicare Special Needs Plans and In-Home Supportive Services (IHSS) in Alameda County. All of the plan offerings are supervised and subsidized by various government agencies.
Ventura County Health Plan was first casualty
Like several of the other regional county based organizations that won contracts to offer health plans through Covered California (Contra Costa Health Plan, L.A. Care, Valley Health Plan, Ventura County Health Plan), AAH has limited experience in the commercial market. Earlier this year, the first health plan casualty happen when Ventura County Health Plan voluntarily removed itself after it had initially been selected to offer health plans through Covered California.
Covered California is in support of Ventura County Health Care Plan’s decision to delay participation for a year and looks forward to having the company bid to be in the exchange in 2015. “We appreciate the executive staff of Ventura County Health Care Plan doing their homework and making a sound decision,” Lee said. “Covered California remains partners with Ventura County Health Care Plan and will lay the groundwork for negotiations next year.” – Peter Lee, CEO, Covered California, August 7, 2013
Regional plans lack market experience
Many of the regional plans have displayed their lack of market based experience by having no clue on how to appoint insurance agents to sell their products. For most of these government inspired and based health plans, they really don’t need to sell private plans on the open market or through Covered California. They are already designated as the Medi-Cal health plan for their respective county they operate in. Consequently, all the individuals, children and families that qualify for Medi-Cal under the new eligibility requirements will have the opportunity to select Alameda Alliance for Health. California will then pay the premium on the Medi-Cal member’s behalf.
Late Friday afternoon announcement
Full text of Covered California press announcement conveniently released on a Friday afternoon in hopes of being buried and ignored by media outlets.
November 1, 2013
COVERED CALIFORNIA REMOVES CARRIER FROM MARKETPLACE
Alameda Alliance for Health Suspended From Insurance Exchange
SACRAMENTO, Calif. — Covered California™ announced today that one of its 12 health plans, Alameda Alliance for Health, will be removed from the choice of exchange products until further notice, because it has not been approved by the state to sell health coverage in the commercial market.
The state Department of Managed Health Care notified Covered California that the company’s application for a “material modification” of its license to allow commercial insurance sales has not been approved, a contractual condition for the company to offer plans in the Covered California exchange for coverage beginning Jan. 1, 2014.
“Alameda Alliance has a solid provider network and is a valuable asset to the community,” said Covered California Executive Director Peter V. Lee. “We look forward to the company getting its commercial license, so we can welcome its plans back to the exchange.”
This does not affect Alameda Alliance’s license as a Medi-Cal managed care plan provider. Covered California will retain its contract with Alameda Alliance and will continue to work with the state and the company to fulfill the requirements to modify its license.
Covered California notified Alameda Alliance in mid-October that a state-issued license was needed to sell health coverage and set a deadline of Oct. 31 for getting state approval.
Covered California informed prospective enrollees that they need to sign up for another plan. Covered California doesn’t expect any impact on coverage in the Alameda County region, as residents can choose from a mix of plans from Anthem, Blue Shield and Kaiser Permanente, with service at a total of nine hospitals in the region.
Removing Alameda Alliance from the exchange portfolio will not affect the calculation of federal subsidies.
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