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Nonprofit health plans operating under the Affordable Care Act

BY SEAN BARRY – During a televised town hall on Sunday, an Ohio voter asked Democratic presidential candidate Hillary Clinton why her insurance premiums went up after the passage of the Affordable Care Act (ACA).

Clinton praised the insurance reforms in the ACA, saying the law has “created a real guarantee of insurance” by ensuring those with pre-existing conditions can find coverage.

She also acknowledged that there is more work to do to bring costs down, citing high prescription drug costs and deductibles.

Confirming that the voter was purchasing directly from her insurer rather than the federal health insurance exchange marketplace, Clinton encouraged the voter to give the exchange a try. Perhaps she will find a plan that is more affordable, or is eligible for federal subsidies, Clinton suggested.

Then, Clinton addressed the plans participanting in state and federal exchanges, and her hope for increased competition.

“Blue Cross and Blue Shield used to be non-profits,” she said. “And then they transferred themselves into for-profit companies.”

Clinton was probably thinking of the Anthem Blue Cross family of companies, which do operate as for-profits, along with a handful of other Blue plans. But it was inaccurate to say that there are no nonprofit Blues. Most — including our own Blue Shield of California — remain state-focused, nonprofit plans, free to make decisions that benefit members and without needing to satisfy shareholders or private owners.

Being a nonprofit doesn’t remove a company from the pressures of the insurance business, of course. Hospitals are increasingly consolidating and demanding higher rates and high-profile specialty drug costs are skyrocketing. Neither player offers a discount to Blue Shield of California because of our nonprofit status.

California is one of the states where the exchange — Covered California — is operating relatively well, with the participation of a number of nonprofits, both large and small. This was reflected in the 4 percent average rate increase for 2016 enrollment, lower than trends in other states.

As she continues to field questions about the future of the ACA, we hope Clinton will keep this context in mind.

Sean Barry is a communications manager at Blue Shield of California.