Ron Goldstein is thinking he may be talking more about accountable care organizations (ACOs) over the next few years.
Goldstein, the president of CHOICE Administrators, a unit of Word & Brown Companies, has been selling health insurance since 1981. He’s been running private health insurance exchange programs since 1996.
Goldstein is based in Orange, California. Managers of the state-based Patient Protection and Affordable Care Act (PPACA) exchange in his state, Covered California, took Goldstein’s advice about the need to work with agents and brokers seriously, and it ended up with a large, relatively healthy population of enrollees.
Goldstein, meanwhile, has been continuing to run private exchange programs for small groups right alongside Covered California.
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For a look at how Goldstein sees the California market, and why ACOs are catching his eye, read on.
Covered California has focused most of its attention on individual consumers, and the agents and brokers who serve them. Goldstein says that, unless the current rules and climate undergo major changes, the current setup may be pretty stable.
In California, carriers have been doing well in the individual market, and they like what Covered California has done to lower their distribution costs, Goldstein said.
But, on the other hand, the current PPACA exchange plan subsidy application process is too complicated to make the market attractive to any competing exchange, and continuing pressure on carriers to squeeze distribution costs could make the idea of going up against Covered California in the individual market even less attractive, Goldstein said.
“I think the market will continue to cut individual commissions,” he said.
Even if the rules changed enough that a private company could buy Covered California, the same barriers that make competing with Covered California daunting could make owning and running it difficult, Goldstein said.
Employee benefits market
Covered California talked early on about making a major effort in the small group market, but it never gave its Small Business Health Options Program (SHOP) much attention, and SHOP division service has been weak, Goldstein said.
An insurer can sell SHOP coverage without the exchange marketing costs hurting its PPACA medical loss ratio (MLR) numbers, but, up till now, that edge has not led to much sales activity, Goldstein said.