A California health expert says it will be interesting to see
how the Golden State implements the nation's first health insurance
The federal government handed California $674 million last week
to implement the state's health insurance exchange. The two-year
grant will fund California's effort to implement the nation's first
insurance marketplace. As a key component of the Patient Protection
and Affordable Care Act (a.k.a. "ObamaCare"), the state-run
exchange allows consumers to compare health insurance plans. Even
though the state received less than expected, officials say they
are excited to launch what they describe as the "biggest
transformation of America's healthcare system" in 50 years. The
exchange must be ready to go by January 2014.
Sally Pipes of the Pacific Research Institute believes that
setting up the exchange will prove to be more difficult than
anticipated, and that many people will be disappointed in the
"Of course, California was the first
state in the nation to take funds to help set up the exchange --
and to date, we still don't have an exchange," she tells
OneNewsNow. "Peter Lee and his Covered California [have] had remendous
difficulty getting this up and running. And as I say, they were the
first state to take the money, and it's going to be very expensive.
I think it's going to be a very difficult situation for people who
are uninsured, who qualify for this update or have to purchase
insurance under the exchange."
The federal government will use the exchanges to monitor if
individuals are complying with ObamaCare. However, Pipes believes
many uninsured Californians may choose to forgo insurance and be
taxed rather than purchase health insurance under ObamaCare.
"I think many people will be very surprised at the cost of
insurance plans within the exchange," she says. "Exchanges are
there for individuals and small business.
"But with the essential benefit plan and the mandates that
insurance companies have to cover, I think that a lot of people,
particularly young people, will say I'd rather pay that
$95 -- the $95 tax, the one percent of income -- rather
than spending what it costs to purchase health insurance. The
young people will say, for them, that it is a great savings and
they feel that they won't be able to afford insurance."
Since ObamaCare requires that no applicant be turned down,
premiums are expected to rise. Commentators say the mandate for
insurance companies to charge a common premium for those insured,
regardless of health conditions, will drive up costs.