California, biggest state in the nation, has its exchange in place

We're just 100 or so days away from the Oct. 1 implementation of the state health insurance exchanges called for by Obamacare but some major insurers, not to mention Republican governors, are hanging back, refusing to have anything to do with the exchanges.

Not so Blue Cross-Blue Shield. They're expected to operate in nearly every state, while UnitedHealth Group and Aetna are proceeding more cautiously.

The idea behind the exchanges is to make it easier for consumers who don't have health insurance through their job to get a health plan that covers their basic health needs at an affordable price -- something that's nearly impossible for most Americans of modest or moderate means  these days.

Anyone who has ever stood in an emergency room while a family member was being treated and tried to remember if the insurance premium was up to date will know how important this is.

It's not just poor people who have trouble getting health insurance. Many self-employed and entrepreneurial types are in the same boat. With premiums for a family of four easily exceeding $1,200 per month in most states and a list of exclusions as long as a stretch limo, health insurance is a very expensive and frayed safety net.

Higher risk

The reason individual premiums are so high -- at least in theory -- is that individuals present a higher risk since the insurance company can't spread the risk over a larger group, as is the case when it writes a policy for Monsanto or General Motors. 

Of course, if everyone could buy insurance, that would create a larger group, no? This is, to over-simplify greatly, the general idea behind the health exchanges that are at the heart of Obamacare, more formally known as the Patient Protection and Affordable Care Act.

New York also has its exchange ready to go.

In California, which is way ahead of the rest of the states in implementing the exchanges, initial premiums have been lower than expected. They vary by location and plan but a 25-year-old in Los Angeles could pay as little as $190 per month for a bare-bones plan while a 40-year-old in San Francisco would pay up to $525 per month for moderate coverage.

In some parts of the state, there are as many as six companies offering plans while in others, there is only one so far.  

Out to lunch

Why governors in states like Texas and Virginia have decided to deny this coverage to their constitutents is something they'll have to explain. Of course, they're covered now and, in most cases, forever by health plans paid for by the taxpayers who can't afford insurance themselves, so perhaps that makes it OK.

Conservatives have objected to the so-called "mandate" -- the requirement that everyone must buy insurance or pay a penalty. By forcing everyone to either buy insurance of pay a fine, the government creates the enormous risk pool that is supposed to make the program attractive to insurers. Those who can't afford the full premium can qualify for a subsidy.

In states where the governors and legislators have been successful in blocking state-run exchanges, the feds will be in charge, which will provide something else for the local impresarios to complain about.

So why are the Blues going full-bore into the exchanges? Well, the simplest answer, as analysts quoted in various press reports explain it, is that they are already the largest insurer in most states, a position they want to protect.

Virginia has done nothing to help its taxpayers find affordable health insurance.

If the Blues sat out the game, in other words, someone else would walk off with a big batch of their customers. So top Blues executives have decided the best strategy is to aggressively go after as much business as they can get, thus protecting their market share and -- not coincidentally -- creating a very large group across which to spread the risk they incur by taking on everyone who applies.

Enough talk

So, after years of political claptrap, Big Business is about to take over and the competition that the Republican governors claim they yearn for is about to commence.

While they may initially be on the sidelines, UnitedHealth, Aetna and others are not likely to stay there long if, as expected, they see Big Blue poaching their customers and portraying themselves as champions of the little guy.

You can expect the Blues to launch an aggressive advertising campaign that will in next to no time blow away the political fog that now surrounds the issue and provide the kind of consumer education that only Madison Avenue can.

Like it or not, Big Government has set up this system but it is now about to step out of the way and let the marketplace do its thing. Soon, as is already happening in California, there will be demands that the government get back into the game and regulate the insurance companies more harshly to ensure that premiums don't get out of line.

What to do

PhotoTo find information about your state, go to the official Health and Human Services site --  

Google and other search engines have not taken the trouble to identify the official government health exchange sites and will most likely direct you to advertisements or sites cleverly disguised to look like official sites. Nor do the commercial sites bother to offer a translation for "Obamacare." 

The search box in the upper right corner of will direct you to the insurance exchange site for your state, if there is one. You can also sign up for email updates.

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