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Health board OKs plan for insurance exchange

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POSTED November 14, 2012 9:37 p.m.


SACRAMENTO (AP) — The board overseeing California's efforts to establish an insurance marketplace for providing affordable health care approved its operational blueprint Wednesday, an essential step toward meeting a key deadline under the federal health care reform law.

The governor's office is expected to forward the plan to the Obama administration on Friday, the deadline for states to notify the federal government about whether they plan to establish health care exchanges. The deadline for states to submit an operational plan, as California is doing, has been extended to mid-December.

"We don't need more time," said Peter Lee, the board's executive director. "We've been working feverishly over the past year, we're excited about going forward, and that blueprint is a big deal."

The action by the California Health Benefit Exchange board, which changed its name last month to Covered California, kicks off a sprint toward the Jan. 1, 2014, deadline for states to have health insurance exchanges up and running.

In 2010, California became the first state to authorize a health insurance exchange after passage of the federal Affordable Care Act. It is expected to offer affordable care to some 3 million uninsured Californians, although Lee said a realistic coverage figure by 2017 is closer to 2.3 million.

Another 1.2 million to 1.6 million Californians are expected to be covered under expanded Medicaid provisions.

Small-business owners who find it difficult to provide health coverage to their employees also are a prime target of the coming marketplace.

"This is a big moment for California going forward," Lee said, shortly before the board unanimously approved the blueprint and an application for more than $700 million in federal grant money. One of the five members of the exchange board, Dr. Robert Ross, was absent.

Some states may opt out, meaning the federal government will step in and operate their insurance marketplace, while others will create an exchange in conjunction with the federal government.

Until open enrollment begins next October, Covered California will hire staff, set up the exchange, begin educating the public about how it will work and select health plans to participate from the 33 that have indicated they intend to submit bids.

Diana Dooley, the board's chairwoman, said the state has made great progress so far in creating a health care marketplace, but said the upcoming year will be fast-paced.

Board members noted that California has more uninsured residents — roughly 7 million — than the entire population of some states. One of the exchange's key challenges between now and the time open enrollment begins is to explain to Californians how they will be affected by the reforms and how this new part of state government will work.

California's ethnic diversity also will be a challenge in getting out the message. The exchange's marketing effort will provide outreach material in 13 languages.

"It's still a very heavy lift," said Dooley, who also is the secretary of the state Health and Human Services Agency.

She and Lee expressed relief that President Barack Obama had been re-elected, because Republicans had vowed to repeal the health care overhaul if they had won the White House. "At least some of the uncertainty that we faced is now behind us," she said.

Covered California's chief mission is to expand coverage by providing low-cost but affordable health care using federal tax subsidies and credits. The marketplace it is establishing will allow consumers to compare plans and prices online.

Under the federal law, consumers will be required to have insurance or pay a penalty, the so-called individual mandate. By 2016, that penalty will be $695 a year per family member, or $347 for dependents under age 18.

In addition to initiating the exchange, California has taken some key steps under the federal health care law. They include banning insurers from refusing coverage for children with pre-existing illnesses and allowing young people to remain on their parents' plans through age 26.

Also Wednesday, the board approved a plan for Covered California to be financially self-sufficient by January 2015, partly through assessments on insurers. It is seeking a federal grant of about $706 million to cover its expenses over the next two years.


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