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CA health exchanges FAIL

RL calls, so maybe somebody else can unpack this detailed article on California's health exchange experiment (via McClatchy, bien sur).

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Submitted by gob on

and I still don't understand anything about what a health insurance exchange is, why it's supposed to improve things for consumers, or much about why California's experiment failed. The only fact I came away with was that in CA, the insurance companies weren't required to participate in the exchange.

If anyone can explain any of this, I'd be grateful.

The state's failed exchange aimed to give small businesses the collective clout to demand better insurance rates. Because of their purchasing power, huge companies generally can negotiate lower rates on their own.

"If you could pull together all these small businesses, they could achieve better rate negotiations with the insurance carriers. If you could get those better rates, it would lead to more joining the program and less uninsured," Grgurina said.

Just how, exactly, would small businesses (think the guy you hired to redo your roof, e.g.) negotiate for better rates???

In contrast, the federal model would be mandatory - a key difference, and one that experts say could make the difference between success and failure.

All the major congressional proposals would require Americans to carry health insurance - obtained either through work, current government health programs or the exchange. Two of the proposals would require insurers to take part in the exchange if they want to offer policies to individuals and small businesses.

For pity's sake, look at that "if" - the writing is so mealy-mouthed you hardly notice that none of the bills require insurance companies to participate in the exchange. So people have to buy, but the companies aren't required to sell. Brilliant.

"It would bring order to chaos," said John Ramey, a former senior health policy adviser for Gov. Arnold Schwarzenegger.

"The chaos that now exists is that people who want to buy the product cannot because they have pre-existing conditions. And there are so many different products that it is hard for consumers to decipher which products are more advantageous to them, because there's really no apples-to-apples comparison," Ramey said.

This is all so abstract, I can't extract any meaningful information from it at all.