Californian policy attracts insurers

Kaiser Health News reported on the government of California adopting policies to help promote more engagement by health insurers. For one, it has offered state-level subsidies (in addition to the federal subsidies) so that more people would find health insurance premiums affordable. The success of insurance plans depend on pools large enough so that the premiums from the policyholders that do not need payouts cover the payouts of the policyholders that do. When premiums are too expensive, healthy individuals might drop out, forcing insurance companies to raise premiums, which in turn causes more people to drop out. California has also adopted a financial penalty to those who opt out of health coverage. Such a penalty was part of the original Affordable Care Act, but was later cancelled.

Interestingly, the executive director of California's ACA health exchange said that nearly 90% of Californians will have three or more carriers to choose from in 2020; apparently three options is a minimum threshold for meaningful competition. Other states also appear to be experiencing healthier exchanges as well.