Blue Cross Backs Down - And What the California Legislature Can Do Now

Community Rating: Insurers cannot be allowed, before offering insurance, to use demographic subslicing to cherrypick the market. That means no more preexisting histories, no complex formulas around age and income and race and region. They offer insurance to anyone who wants it for the exact same price. No exceptions.

Risk Adjustment: Merely having everyone in the system won't be enough, and nor will forcing insurers to do away with their most delicate cherrypicking tools. Insurers will just become sophisticated at advertising on G4 Tech TV, and in snowboarding magazines, and in urban centers -- in places, in other words, where the young and the healthy gather. So atop the universal system, atop the community rating, you need risk adjustment, which means either that insurers are reimbursed more for taking on sicker patients, or, my preferred method (and the one used in Germany), insurers with particularly healthy pools pay into a central fund that redistributes to insurers with less healthy pools. At the end of the day, it has to be as profitable for an insurer to insure a sick person as a healthy one.

Information Transparency: It needs to be easy for individuals to compare insurers on plan comprehensiveness, price, outcomes, etc. That means we need a marketplace where folks can go to shop for insurers, and they need to have standardized comparisons, or non-partisan rating authorities, providing information they can use.

One Market: This is contained in the last point, but there needs to be a singular place, or set of them, where individuals can shop around for insurance. This is hard stuff to find, and harder yet to understand, and real effort needs to go into constructing an easily accessible marketplace that customers can effectively navigate.

And the legislature can absolutely go through the incremental steps to implement these policies and make the current broken system a little more fair and more beneficial. The last two could arguably pass right now.

Dave is a writer, comedian and TV/film editor based in Santa Monica. He is an elected member of the Democratic State Central Committee from the 41st Assembly District. He blogs on state and national politics at http://d-day.blogspot.com/