The market for local health plans is getting bigger

Zocalo Public Square

Part of Zocalo Public Square’s discussion: “Is Local Healthcare Better Healthcare?”

Local providers’ participation in Medi-Cal is more critical than ever—in part because more than 1 million new Medi-Cal enrollees are predicted under the Affordable Care Act, and because those enrollees will significantly increase the number of people in locally based county-affiliated plans (such as L.A. Care).

The California market for individuals signing up for healthcare on their own, without a group plan, is predicted to double in size by 2019 because of new subsidies for purchasing private coverage, the ban on denying coverage based on pre-existing conditions, and the requirement that individuals have coverage or pay a penalty. This growth creates an opportunity for local health plans to increase enrollment.

Four big commercial insurers covered the vast majority of Covered California enrollees (94 percent), just like they did in the individual market in 2011 (91 percent). But the six local plans offered through Covered California in 2014 had somewhat higher market share (5 percent) than local plans had in the individual market in 2011 (2 percent). Chinese Community Health Plan had 28 percent Covered California market share in San Francisco, the highest of any local plan.

Covered California’s 2014 premiums were lower than experts predicted, and 2015 premiums grew at a lower rate than was typical pre-reform. These premiums partly reflect more limited provider networks in some Covered California plans, including Anthem and Blue Shield, compared to some of their job-based or individual market plans. Under narrower networks, some local providers may gain patients, while others may see fewer.

Over the next few years, enrollment trends will reveal consumers’ level of willingness to trade off provider choice with lower premiums. In the meantime, a California law (California Senate Bill 964) signed in September increases state oversight of individual market and Medi-Cal plans’ provider networks to help ensure adequacy and timely access to care.