Correction: A previous version of this story stated that the executive director of California's health insurance exchange is an unpaid, parttime position. It is a fulltime and paid position.
Originally published May 18, 2011 at 6 a.m., updated May 25, 2011 at 11:52 a.m.
Some features of the landmark health care reform law are already in place. But the biggest benefit for consumers won’t be introduced until 2014. That’s when people will able to use an online marketplace to shop for low-cost health insurance.
SAN DIEGO Millions of Californians buy their own health insurance. For many of them, coverage is becoming too expensive.
Billy Stevens runs an auto repair shop in San Diego’s North County. Stevens doesn’t want his real name used, for fear his insurer would cancel his health coverage.
He and his wife are in their 50s. She’s had some health issues, but Stevens says he never goes to the doctor.
Since health reform passed last year, Blue Shield has raised Stevens’ premiums three times.
They’re now paying nearly $23,000 a year in premiums, plus they each have a $5,500 deductible.
"When I heard about health reform," Stevens said, "I thought I was gonna get a break, it might go down. But it has just kept on going up and up and up. It’s just gotten to the point that it’s unaffordable. There’s no end in sight."
But the end is supposed to come in 2014. That’s when California will unveil a health insurance exchange.
Kim Belshe is former Gov. Arnold Schwarzenegger’s Secretary of Health and Human Services.
Today, she’s on the board that will oversee the creation of California’s health insurance exchange. She said it's a key element of health reform.
"It is a new online marketplace that people will be able to go to compare shop and enroll in quality health coverage," she said.
Belshe believes the exchange could be one of the answers to California's health insurance crisis.
"Overall", Belshe said, "the health exchange offers California a tremendous opportunity, not only to expand coverage to millions of Californians who will purchase coverage through this marketplace, but also improve quality and affordability more broadly."
At least that’s the promise. But right now, it’s just an idea.
California is the first state that’s taken steps to create an exchange. The newly created board held its first meeting last month.
Belshe admits they have a lot of work to do. The board has to create a service that offers a wide variety of health plans with varying degrees of benefits - from bare bones to deluxe.
Belshe said she and her colleagues must find a way to make enrollment and eligibility consumer-friendly.
"Getting these operational decisions right is important, and the exchange board is committed to doing so in a very public and transparent way," she pointed out.
"That’s why our motto is 2014 is tomorrow, we gotta get on with it."
An estimated 3 million people buy health insurance on California’s pricey individual market. Because they’re self-employed or work for a small business, that’s their only option.
Nearly 7 million Californians have no health insurance at all.
Dave Jones is California’s insurance commissioner.
He said above all, the exchange needs to make sure coverage is affordable.
"Under the exchange, I think we’ll see some more affordability," Jones remarked. "But I also think that we’d see even more affordability and even lower rates, if we had the direct authority to reject excessive rate hikes."
Unlike premiums for auto and homeowner insurance policies, the price of health insurance is not regulated in California. Only under rare circumstances can state regulators block health insurers’ fee hikes.
A bill to give regulators veto power over health insurance rates is moving through the state legislature. Consumer advocates say without it, the exchange can’t guarantee premiums will be reasonably priced.
Billy Stevens said he needs some relief. He can’t pay his insurance tab anymore.
"I’m gonna have to drop myself off the plan," he said, "because I just cannot afford to have both of us at the costs of what we’re doing. And I’m fairly healthy, and I’m gonna just roll the dice."
Meanwhile, California’s health insurance exchange board is trying to get going - they are looking for an executive director.