Covered California is set to be the nation's first health insurance exchange as mandated by Obamacare, the government healthcare reform law. Billed as an affordable solution to the issue of uninsured Americans, the program held the promise of providing cost-effective policies to low-income individuals who would otherwise be uncovered.
This week, however, a group of California's largest insurance companies such as Cigna, UnitedHealth and Aetna have decided to not participate in the exchange. The development, reported earlier this week by the Los Angeles Times, threatens to scuttle the Obama administration's implementation plans and poses a huge risk to the future of the reform law.
Peter Lee, Covered California's chief executive, brushed aside these concerns during a press conference on May 23. He stated that officials from the exchange will continue to work with insurers that wish to participate in the program. However, he acknowledged that the announcement could pose complications during the enrollment start this fall.
"We want Goldilocks pricing," Lee said, referring to the affordability of the exchange's plans. "We don't want prices too high, but we also want to make sure there's enough money so patients can get the care they need."
Will this industry rejection imperil the future of Obamacare? At this point, it's unclear, as many states have yet to pass the raft of legislation – as California already has – necessary to implement the Affordable Care Act. The Golden State will most likely become ground zero for conservative scrutiny surrounding the program, which will undoubtably come at the expense of meaningful economic reform that is sorely needed in the United States.
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