Posts Tagged ‘California Department of Managed Health Care’

California officials to review licensing for HealthCare Partners –

October 30, 2012 Leave a comment

This Los Angeles Times story illustrates the blurring of the distinction between payer and provider that has caught the attention of California managed care plan regulators.


Blue Shield of California shifting from insurance to managed care plans

While about another development, buried in this San Francisco Chronicle story published today is a revealing disclosure by Janice Rocco, deputy commissioner of the California Department of Insurance.  Rocco told the Chronicle Blue Shield of California will have only three individual insurance plans open for enrollment after it closes nearly two dozen existing plans next month.  Rocco is quoted as saying the insurer is seeking approval from the Golden State’s managed care plan regulator, the Department of Managed Health Care, to nearly double the number of managed care plans to 20.

This development is counter to the market trend of the previous decade in which individual market consumers shifted out of more comprehensive and costlier managed care plans to cheaper, high deductible insurance plans overseen by the Department of Insurance.  Blue Shield could be preparing to offer richer, lower deductible managed care plans that can meet the essential health benefit requirements of the Patient Protection and Affordable Care Act in order to potentially qualify them for the California Health Benefit Exchange in 2014.  Blue Shield’s shuttering of the nearly two dozen individual insurance plans is likely due to their falling into the death spiral of adverse selection.

Anthem Blue Cross: California individual managed care plan market shrinking, necessitating higher premiums

The California Department of Managed Health Care (DMHC) is questioning the reasonableness of a May 1 rate increase Anthem Blue Cross will be taking for 120,000 individual managed care plan members.

DMHC sent a letter to Anthem Blue Cross asking for an explanation for the rate increase and why it is higher in comparison to indemnity-based insurance products with similar deductibles. DMHC regulates managed care plans in the state.

In an April 25 letter in response to DMHC, Anthem Blue Cross states its individual managed care plan pool is shrinking.  The letter strongly implies adverse selection requires it to boost rates to keep up with losses incurred by those members remaining in the pool who tend to use high levels of medical services.  Anthem Blue Cross projects it will incur a medical loss ratio of 88.5 percent for individual managed care products for 2011 after a 16 percent rate hike and increased deductibles effective May 1.

See the conclusion section on page 7 of Anthem Blue Cross’s letter.

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