Which market segment is being targeted by Kaiser in California?

Megan McArdle updates us:

Kaiser Permanente is one of the places that always gets cited as a model by health care reformers.  It’s the biggest insurer in California, using a model that ended up being the basis for the HMO revolution.  Kaiser owns its own hospitals, pays its doctors a salary, and provides the “continuum of care” that everyone says they want from our fragmented health care system–and does it at a reasonable price.  So it’s a bit surprising to see the LA Times report that this model citizen submitted some of the highest bids for California’s health care exchanges.

…California is headed for two-tier service on the Exchanges.  The carriage trade will head for full-service networks like Kaiser, with full access to the whole network of doctors and hospitals.  The price conscious buyers–likely to be a sizeable majority–will crowd into plans with restrictive networks.  And those networks will be very, very crowded.  Effectively, they may end up as quasi-catastrophic insurance, simply because it will be difficult to actually access care outside of the emergency room.

Lower down the income scale, the new Medicaid patients–about half the expected additional coverage in states like California–will be similarly crowded, simply because Medicaid’s low reimbursement rates make doctors reluctant to take it.

Note that, for reasons explained in the post, this may not apply outside of California in every other state.


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