California's Health Benefit Exchange: The Future Envisioned

Four visions for the California Health Benefit Exchange see it leading premium reductions, putting consumers first, reforming care delivery and payment, and aligning with Medi-Cal.

August 2011

The California Health Benefit Exchange (CHBE) is core to California's implementation of federal health reform. The Affordable Care Act (ACA) defines important aspects of an exchange's role and authority but leaves considerable flexibility — and responsibility — to each state to establish its strategic direction.

To help inform the CHBE's early strategic and operational decisions, CHCF contrasted varying visions for the exchange. The intent: to formulate strong alternatives that could help crystallize the implications of pursuing one path over the others. A meeting convened at CHCF and subsequent interviews identified a range of potential CHBE goals. Four approaches emerged:

  1. Price Leader: The CHBE as a Driver of Low Premiums. The promise of health reform is to make health insurance more affordable and accessible for individuals and small businesses. This approach focuses on the exchange as primarily a cost-focused store that offers the most competitively priced health plans.
  2. Service Center: The CHBE as a Consumer Destination. An exchange centered on service and expanded consumer options would help to build public support for reform and create political leverage to transform the market. This approach positions the exchange as a consumer-friendly, one-stop shop with broad choices on plan design, accessible information, and strong customer service.
  3. Change Agent: The CHBE as a Catalyst of Finance and Delivery Reform. One of the many possible priorities that could be emphasized by the exchange — and perhaps the farthest reaching one — is long-term reform of the health care system. Such an exchange would establish incentives to encourage innovation and improvement in the cost, quality, and efficiency of health care delivery.
  4. Public Partner: The CHBE Aligned with Medi-Cal. The exchange as Medi-Cal partner would adopt an array of policies and practices that align with Medi-Cal's efforts to improve the health status and health care outcomes of low-income, high-need individuals. It would focus on enrolling and retaining these groups and maximizing continuity of coverage and care for people who experience changes in income and program eligibility. It would carefully consider the impact of decisions on Medi-Cal spending and the state budget, and seek to minimize budgetary pressures to reduce Medi-Cal benefits, provider payments, or eligibility.

Supplementing this research is an introductory paper that sets the work in context. A sixth paper examines the core operational requirements needed, since the exchange will be required to operate both as a public entity entrusted with implementing the ACA's provisions and as a private-sector marketer of health plans.

The six issue briefs are available as Document Downloads.