Editorial: State must give on stand-alone vision plans

As the first state to authorize a Health Benefit Exchange after President Barack Obama signed the 2010 federal health care reform, California jumps into a national leadership role in defining the new marketplace.

Make no mistake, in a state as large and diverse as California this is a herculean task.

The good news is that medical, dental and vision plans are fighting like the dickens to get a chance to compete in this new marketplace. They are not abandoning it.

So the controversy over how to include vision plans, as reported by Dale Kasler in Wednesday's Bee, should be seen as a healthy sign.

VSP Vision Care, the largest vision benefits company in the United States, founded in 1955 and headquartered in Rancho Cordova, wants to be able to compete to offer stand-alone vision plans through the exchange to currently uninsured individuals and small businesses.

The California exchange board should make that possible – when the exchange opens January 2014, not waiting until future years.

The board already has had to make some tough decisions.

It has had to decide whether the exchange should focus only on offering "essential benefits" plans to individuals and small businesses for the January 2014 opening. Under the federal law, dental and vision coverage is an essential benefit for kids only.

So states have had to decide whether their exchanges also will offer supplemental dental and vision coverage for adults.

The California exchange board has decided to do both essential coverage for kids and supplemental coverage for adults, a good thing.

But here's the rub. While federal law says that essential dental coverage for kids can either be embedded in a comprehensive medical plan or stand alone, it says nothing about vision. So the board, in an initial decision in August, said that essential vision coverage for kids could be offered only if it is embedded in a comprehensive medical plan – not as a stand-alone plan.

This makes no sense. In the current private market, dental and vision coverage is rarely embedded in medical coverage; it is sold in stand-alone policies. In fact, more than 90 percent of dental and vision care in California is delivered by stand-alone plans. In public programs, such as California's existing Healthy Families program, vision coverage is delivered only through stand-alone plans.

Yes, the board is right that the addition of federal subsidies for individuals based on their income makes things complex if you have to divide payments between separate medical, dental and vision plans. But if the exchange already is figuring out how to handle stand-alone dental, it certainly can do the same for stand-alone vision.

Private employers have been offering medical, dental and vision separately for years, with a mix of employer-subsidy and employee payments.

The exchange can do this, too.

To its credit, the board is allowing stand-alone vision plans for adults as a supplement for small businesses. Oddly, however, it is not allowing stand-alone vision plans as a supplement for individuals.

Certainly it is true that, today, most people get stand-alone vision coverage through an employer; it is not at all common in today's individual market. For example, of VSP's 14.2 million current customers, only 20,000 buy stand-alone vision plans as individuals.

But Al Schubert, a vice president at VSP, sees a growing, emerging individual market ahead with the federal health care overhaul – and sees opportunities in both the small business and individual markets in state exchanges. "We don't want the market correction to leave us behind," he told the editorial board.

The exchange board has said it would revisit its August decision at its October meeting. Stand-alone dental and vision plans should be offered the same way in the exchange's small business and individual markets – as an essential benefit for kids and a supplement for adults on Day 1, 2014. That makes consumer choice simple – and it allows a key local firm to compete in the new marketplace.

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