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Insurers Picked For California Health Exchange

DAVID GREENE, HOST:

More, now, on the new federal health care law. States are preparing for that law to take effect. In California, officials have now unveiled plans - and prices - for millions of residents who will be using a new health insurance exchange to purchase their coverage next year. This is a key test of the federal health law's ability to draw competitive bids from insurance companies. Sarah Varney reports.

SARAH VARNEY, BYLINE: Perhaps the lesson of California's efforts to keep insurance premiums in check is, carry a big stick. State lawmakers had granted those running the state marketplace considerable power to negotiate on behalf of about 5 million Californians who don't get coverage through their jobs.

And negotiate, they did. Nearly three dozen health plans submitted bids. The state rejected those that were priced too high, or skimped on doctors and hospitals; and picked four of the largest commercial insurance companies and a handful of regional health plans.

The premiums for plans - from the bare-boned to the fully-loaded - were lower than most consumer advocates and analysts had predicted. Betsy Imholz, with Consumers Union, was at the press conference in Sacramento on Thursday, that had the celebratory feel of a space shuttle launch.

BETSY IMHOLZ: I'm impressed. I actually think that they are good prices. They're kind of within the realm of what is - hoped for.

VARNEY: For example, a 40-year-old living in Oakland, Calif., who earns about $4,000 a month could buy a decent policy for $317 a month. Low- and moderate- income households will be eligible for federal income tax credits, to offset the price of private insurance. Premium prices still need to be approved by state regulators.

I'm Sarah Varney, in Sacramento.

GREENE: And that story is from our partner Kaiser Health News, a nonprofit news service. Transcript provided by NPR, Copyright NPR.

Sarah Varney