Orange County business owners will be impacted dramatically by healthcare reform and by the continuing debate on how best to achieve the goal of universal coverage.
Yet one of the most important features of the new legislation also is one that has curiously garnered very little public attention. This is the mandate that each state establish and launch a health insurance exchange by Jan. 1, 2014.
Health insurance exchanges promote choice and make health insurance more affordable by allowing an individual or small business to compare the costs and benefits of multiple health plans while accessing various subsidies and tax credits.
With such information and support in hand, small business owners and individuals will be better prepared to select a health plan that best fits their needs and budget.
Business Owners
The county is home to nearly 80,000 small businesses, according to Inside Prospects Inc.
They represent 93% of all OC businesses.
They know what other business owners in California have felt—that statewide health insurance premiums increased 7.5% in 2009 compared with a 0.6% decrease in overall consumer prices.
What’s more, since 2002, premiums have increased by 118%, more than four times the 23% increase in California’s overall inflation rate.
With health insurance premiums rising at such an alarming rate, it is no wonder that small business owners are looking for relief and some clear path to value-based purchasing.
That’s why the decision of how health insurance exchanges are implemented is so important.
If done properly, exchanges have the capacity to help us move to a more rational method of purchasing health coverage, while moving us closer to achieving universal healthcare.
In that regard, Cal-ifornia has a leg up on the rest of the nation.
We’ve already experienced both sides of the equation—the failed state efforts to create an exchange and the private sector establishment of a health insurance exchange for small and midsize employers, called CaliforniaChoice.
Choices
The challenge now is to find a way to harness all of this experience so that as many eligible persons as possible can be enrolled in the new exchange with the least possible disruption to individuals or local employers.
Toward that end, California’s regulators have a choice.
One option is for them to attempt to eliminate all competition and try to do it all themselves. But that would be disrup- tive to the employers and consumers, who would be forced to change insurance arrangements.
It also raises the question of whether running a retail insurance “store” for Californians—which is what, in essence, the state exchange will become—is an appropriate venture for government.
After all, this is not exactly an area where there is a track record of government success.
A much better recipe is the creation of a public-private partnership that harnesses existing private sector distribution channels, such as brokers and insurance agents, that already touch millions of citizens every month.
Establishing the exchange in this way also would best serve the needs of those millions of consumers and businesses who will qualify for subsidies or tax credits, and who deserve the same dignity and freedom to shop as will be available to commercial insurance shoppers.
Public-Private Partnerships
While other states are trying to figure this all out from scratch, let’s take advantage of the unique opportunities we have here in California and form the kind of public-private partnership that will achieve goals set forth in the new legislation in the most efficient and cost-sensible manner possible. In doing so, California can be a model for the rest of the country in showing how to do this right.
Healthcare purchasing needs to be a collaborative process between all parties if the goal of universal coverage is to be achieved.
We know from experience that establishing, marketing and administering a health exchange is no easy task, which is why previous state-run small-group exchanges have failed.
But California cannot afford to fail again. The new exchange must work properly.
Millions of Californians and 80,000 of OC small business owners are depending on it.
Ron Goldstein is president of Choice Administrators Exchanges, the administrative branch of the state-approved health insurance exchange, CaliforniaChoice.
