California, the Golden State, named incidentally for the state flower, the Golden Poppy, not for the veins of the shiny metal that engendered the Gold Rush of the mid 1800’s, has often been a national leader in many ways over the years.

Now, in the arena of national health care reform, California with its Covered California (CoveredCA), the first state benefit exchange in the nation, is leading the way in the creation of state health insurance exchanges or marketplaces. These exchanges, created by the Patient Protection and Affordable Care Act of 2010 (PPACA, the ACA, or Obamacare) will allow both individuals and small businesses with up to 100 employees to purchase qualified health care coverage.

The ACA requires that all states have operating exchanges by January 1, 2014, and provides two alternative options for the states to do so:  either create their own, or default to a federally run exchange.

Initially when the law was passed in March of 2010, estimates were that it was likely that of the 50 states, 40 or more would choose to create their own exchange, while the balance would default into federally run programs.  In fact, as of this date, the facts show precisely the opposite. Only 17 states have taken the path of doing it themselves, while 33 have decided to leave it up to the feds.  (For a breakdown of which states have chosen which path, see page three here).

In May, CoveredCA made three significant announcements.

First, they announced the health insurance carriers that would be offering plans in the exchange, though several major national carriers which have been offering plans in California for years were conspicuously absent from the list: Aetna, CIGNA, and United Healthcare.  Anthem Blue Cross, the largest non-Kaiser provider of health plans in California subsequently joined those three as a non-participant, leaving only three major insurers in the Small Business exchange: Kaiser, Blue Shield, and Health Net.

Second, CoveredCA provided a comparison chart showing plan benefits and costs for two examples, a 25 year old and a 40 year old, and promised to release full details for all plans and their respective costs in June.

Third and last, CoveredCA confirmed that only licensed insurance agents would be able to actually sell these plans, and that an additional certification would be required on top of an active insurance license to do so. Planning, they said, was underway for the certification requirements, process and completion protocols, and the required classes would be available no later than early August.

At this point the timeframe was beginning to look a little tight, since the plans are scheduled to go on sale as of October 1, 2013 for a January 1 effective date.

June and July passed with no announcement of complete plan and cost details. The explanation given was that the release had been delayed until August due to “rate concerns.”

In early August, CoveredCA released a statewide rate summary reflecting costs for four sample plans (see pages 14 & 15 here), but nothing more.  Since that time, nothing more has been heard about rates or benefits.

Within days it was also announced that agents should pre-register for the certification classes.   August 19 was announced as the date on which agents would be able to register with CoveredCA and sign up for those new classes.

Unfortunately, when August 19 dawned the massive outpouring of agents trying to sign up for classes crashed the CoveredCA website, and few if any agents were able to get in without hours of hitting their web browser’s refresh button.  It was then discovered that in spite of previous assurances that the pre-registration would expedite the actual registration process for certification classes, it did not. Instead, all agents were required to redo their registration and wait for that registration to be approved before being able to actually sign up for certification classes.  To date – nearly three weeks later –  the vast majority of California agents are still reporting their registration process as “pending”.

With less than three weeks to go before the product goes on sale, rates and plan benefits are still unknown.

The bottom line:  CoveredCA, the self-proclaimed leader in the implementation of the ACA’s state benefit exchange sweepstakes has made little or no progress on the three key steps required to bring their product to consumers:

1 – Providing sufficient numbers of certified agents to help consumers buy the new plans

2 – Telling consumers and agents alike what the various benefit plans and plan options will actually provide in terms of benefits and coverage, and

3 – Letting everyone involved know the costs of the plans and how those costs will vary between multiple plan options.

We, as interested observers and potential clients, have two critical questions to pose:

1 – If California, the national leader, is this far behind where they promised to be and where they should be to have a viable, functional product available by October 1, how far behind the deadline are all the rest of the states and the federal government?

2 – If they’re this far over their heads in getting ready to sell these brand new plans to millions of people all over California, how ready are they going to be to administer, service, and satisfy those millions of people as customers once they sign up for coverage?

I, for one, have no great interest in becoming one of the guinea pigs in the beta testing of CoveredCA’s upcoming product launch. Do you?

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