Creating Healthcare Choices for Small Companies
In the mid-1990s, a general insurance agency came to us asking how it could expand healthcare coverage for employees at small companies. That question led us down a path to helping them create and develop a brand new healthcare coverage model.
At the time, most small companies – if they offered employees healthcare coverage at all – could offer at best only one benefit package. We envisioned a business model that enabled employees at small businesses to choose from multiple HMOs and insurance products, for medical, dental, eyecare and chiropractic/acupuncture benefits. The new construct was a healthcare coverage "exchange." The California regulators, however, were unsure about how to fit this innovative model into their established structures.
We drew on our strong working relationships with officials at the Department of Corporations, which then oversaw managed healthcare, and at the Department of Insurance, to collaboratively forge a regulatory framework for the exchange. Through that first-of-its-kind exchange, known as CaliforniaChoice, today more than 320,000 persons have healthcare coverage, through their relationships with nearly 18,000 employers. Nearly half of these people had had no prior healthcare coverage.
Under the Affordable Care Act, Congress has now mandated state healthcare exchanges or participation in the federal exchange. Today, the private-sector CaliforniaChoice exchange out-performs the public Covered California Exchange by 10-1 in the small group sector.