Tough Negotiator? Covered California Chief Says The Fewer Health Insurers The Better

Covered California Chief Peter Lee has claimed that the state doesn’t need health insurance premium regulation because Covered California is a tough negotiator with the health plans.

A study out yesterday casts doubt on that proposition as researchers reported that Covered California health insurance plans have among the narrowest doctor networks in the nation – the 4th worst record.  

Today, Lee weighed in on the Wall Street Journal editorial page in favor of health insurance consolidation and Anthem Blue Cross’s acquisition of Cigna. He says bigger is better for consumers. It’s an outrageous position for the head of an agency Californians counted on to negotiate with health plans.

In his op-ed, Lee neglected to mention that 75% of the California policies he negotiated have narrow physician networks – defined as including 25% or fewer physicians in an area.  By contrast, nationally, 41% of plan networks were considered narrow.

Narrow networks are the new premium hikes. Patients in them often don’t get to use their health insurance because they can't get an appointment with an in-network doctor, so they have to pay out of pocket for care. 

Premium increases may be smaller in California, but what Californians are getting for their money is cut-rate coverage because there’s so little competiton.  And 44% of Covered California policyholders find it difficult to pay their monthly premiums for coverage.

Lee’s pimping for the Big 4 health insurance companies that control 94% of the Covered California market shows how little “negotiation” goes on at Covered California.

What kind of negotiator would want fewer entities to negotiate with? 

Earlier in the year, Lee prevented Cigna and United Healthcare from competing with the Big 4 statewide under the rational that he didn’t want to create too much competition for Anthem Blue Cross, Blue Shield, Kaiser and Health Net.

"United or other plans that were in the market in 2012 should have a higher bar" to joining the state exchange, Lee told the Los Angeles Times. "We think the health plans that helped make California a national model should not be in essence undercut by plans that sat on the sidelines.”

Four big companies constitute an oligopoly, and Californians are suffering under it. 

Lee’s shilling for the Big Four in the Journal today included misleading readers about competition in his exchange and shows that Covered California is little more than an insurance broker advocating the insurance industry’s snake oil.

Cross posted at Huffington Post 

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