California officials are working to make health insurance for California more affordable and value-based with plans for an Internet-based exchange. The plan is expected to not only help individual consumers, but to also help business owners struggling with escalating California health insurance rates.

In California, health insurance premium increases have outpaced the rate of inflation by more than four fold. While the state's overall inflation rate has increased 23.1 percent since 2002, California health insurance premiums increased by 117.5 percent.

In the legislature, attempts to bring rate increases under regulatory control were defeated by insurance companies in 2008, 2009 and 2010. Determined to gain authority similar to that already in existence in some other states where regulators can prevent unwarranted rate hikes, California legislators have proposed a like-minded bill in the current session.

California Health Insurance Exchange Is Based On Working Model

In Southern California, the country's oldest and most successful California health insurance exchange already serves more than 150,000 members and almost 12,000 employers. CaliforniaChoice has been in operation for 15 years and provides a successful working model for the future exchange.

Growing out of the Affordable Care Act that became law in 2010, the new California health insurance exchange is meant to give consumers greater choice in health plans. Something similar to an Internet-based shopping mall is being designed to expand access for individuals and employers to see how health plans stack up to each other in side-by-side comparisons.

Health Insurance For California Will Provide A Standard Set Of Benefits

To protect consumers from the "small print" that can conceal exclusions and limits to significantly reduce coverage consumers may think they are buying, the California health insurance exchange will have a standard set of benefits. Health care services will cover specific benefits while offering different levels of cost sharing, such as co-pays and co-insurance.

The Affordable Care Act not only has provisions to make health coverage more transparent, but it also includes government subsidies to share access to health care with U.S. citizens who can't afford the cost of California health insurance premiums. Financial help will be based on family size and income.

The new exchange may for the first time give individuals and employers the chance to enjoy health plan that is similar to what members of Congress have. Employers who still offer health plan benefits will need to change how they provide coverage to transition into using the new exchange. Employers can provide employees with voucher-like premium contributions. Employees can use these to select a health plan from several plan options at different benefit levels and prices through the exchange.

With greater clarity and standardization among health care plans offered through the state exchange, comparing California health plan quotes will be easier and give consumers a more realistic idea of what they are actually purchasing. They'll also enjoy an increased sense of oversight.

Perhaps the days of bogus health plans being freely sold will come to end in the near future. As we've recently seen, regulation has not protected consumers who faithfully paid insurance premiums only to discover their medical bills were never paid because an insurance company was allowed to take their money without maintaining the funds to pay for claims.

While still a work-in-progress, the California health plan exchange may be a first step toward making access to health care more of a fair business exchange and less of a gamble. Extending health care services to more citizens has benefits that go far beyond benefits for individuals, families and small business owners. Withholding care until emergency services are required has a much higher cost for society than offering preventive care. In terms of both financial and moral costs, the new state exchange shows great promise.

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