California Aims Reining In "Affordable" Health Insurance Providers

Armen Hareyan's picture
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California regulators have started to clamp down on companies that present themselves as providers of affordable and discount health insurance plans and often overstate benefits, sending the customers to 'phantom networks' of doctors. CA officials say they have received complains about 150 licensed insurance companies.

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It may seem that the officials in California are trying to crack down on those companies that are offering affordable health insurance to nearly 7 million uninsured people in the state. However, as CA has very high rates of joblessness and many people without medical insurance coverage it provides, what LA Times calls "a fertile environment for discounters," and many times make promises that some don't deliver. According to Consumer Health Alliance there these "discounters" serve nearly 6 million people in the state. The rest of the people that have coverage, get it through health maintenance organizations. Those people are 21 million. Thus, nearly 23-25 people of the insured in California are covered through these "discount" health insurance plans.

Some of these providers cheat and take advantage of the poor people. "They're basically cheating poor people," LA Times quotes Dr. Dev GnanaDev, immediate past president of the California Medical Assn.

The executives of the "discount health insurance" industry say while there are some bad companies, they tarnish the reputation of an entire industry that offers relatively inexpensive services. They call it reliable too, but the cases discussed in the above-mentioned article don't demonstrate it. No wonder the government agencies have received 150 complaints. Now the California Department of Managed Health Care will seek new licensing regulations for these entities that claim to offering affordable health insurance.

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