California Health Benefit Exchange board member Kim Belshé recently said that the exchange could help transform the state's health insurance market by being an "active purchaser" of health plans, the Contra Costa Times reports (Kleffman, Contra Costa Times, 7/31).
The federal health reform law requires states to launch online insurance marketplaces by 2014.
The California Health Benefit Exchange primarily will serve individuals and small businesses (California Healthline, 7/26).
Supporters hope that the exchange will function similar to websites like Amazon.com and Expedia.com so that users will be able to choose between various health plans through an easily navigable online store (Contra Costa Times, 7/31).
An estimated 4.4 million California residents are expected to use the exchange by the end of 2016.
Officials plan to open registration for the exchange in October 2013 (California Healthline, 7/26).
Exchange Will Be 'Active Purchaser'
According to the Times, state lawmakers made the exchange an active purchaser by allowing it to negotiate with insurers, decide which insurers can offer health plans through the exchange and set criteria for participating plans.
Belshé, former secretary of the state Health and Human Services Agency, said that the exchange can select health plans based on quality, price and the adequacy of the provider network. She added, "To be an active purchaser means that we have the ability to say we are trying to drive better value."
Belshé noted that only a few states out of the 16 creating health insurance exchanges are active purchasers. She said that many state exchanges will offer all available health plans, making them "the equivalent of the yellow pages."
However, Belshé said, "No single purchaser alone is going to transform the marketplace." She noted that the exchange can try to improve health care delivery in the state by joining with other large purchasers.
Criticisms of Active Purchaser Model
John Graham -- director of health care studies for the Pacific Research Institute -- said, "You're going to have much less choice" with the active purchaser exchange model.
He added, "The health insurance available to you will be limited by what [state officials] selectively contract." Graham said, "Amazon is not governed by five political appointees."
He also criticized the cost of establishing the exchange and predicted that many employers will drop company health plans, leaving workers to purchase their own insurance through the exchange (Contra Costa Times, 7/31).