Covered California Gives Blue Shield a Monopoly in Six Counties

Irfan Khan/Los Angeles Times via Getty Images

Covered California is effectively giving Blue Shield a monopoly over health insurance in almost a quarter of California counties.

With Anthem Blue withdrawing from Covered California, 60,000 of its former members spread across 13 of California’s 58 counties will have no alternative to enrolling in Blue Shield of California next year, according to the Obamacare for California website.

Blue Shield of California now has a Covered California monopoly in six counties ,including Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo and Mono. Blue Shield also has a monopoly in sections of another seven counties.

Covered California launched its first enrollment effort in August 2013 by offering competitive coverage from twelve top insurers, including Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente, Health Net, Chinese Community Health Plan, L.A. Care Health Plan, Molina Healthcare, Sharp Health Plan, Valley Health Plan, and Western Health Advantage.

Armed with $1.1 billion of federal organizing cash and $37 million in marketing cash, Covered California projected that 5.3 million Californians would be eligible for Obamacare coverage. With 2.6 million Californians supposedly eligible for subsidies towards their health care premiums, it was estimated that 3 million would enroll in the plans that offered a coompetitive “wide variety of doctors, hospitals and health care delivery systems.”

But even by using the Covered California membership application to automatically qualify those eligible for free Medicaid enrollment, only 1.4 million people signed up. Of the just 300,000 individuals that agreed to pay some amount of money to “buy” health insurance from one of the 12 insurance companies listed on the Covered California exchange, 15 percent never sent in a single payments, and up to a third stopped paying during the year.

With the economics of the government-sponsored scheme — that was supposed to drive down health care costs and maximize health provider participation — having imploded, there is no Covered California health insurer that provides full PPO and HMO product coverage for the entire state of California. Only 83 percent of California hospitals will provide patient services to at least one Covered California health insurance company, and there are just 53 percent of hospitals that are willing to provide patient services to at least 3 or more of health plans.

Breitbart News reported early this month that despite an annual inflation rate of only 1.6 percent, Covered California granted insurers average premium increases of 12.5 percent for 2018. Despite premiums jumping by about eight times inflation, Covered California stated that it may raise premiums another 20 percent if the federal government canceled cost-sharing-reduction payments that have been deemed illegal by federal courts.

The Obamacare scheme was sold to American voters on a promise that expanding the number of Americans that bought health insurance would slash all healthcare insurance premiums by up to $2,500 per family. But mandatory new benefit rules have caused insurance premiums for employer provided health insurance to spike by 68 percent between 2010 and 2015, according to the National Association of State Legislatures.

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