OAKLAND -- Alameda County residents shopping for health insurance on the state's new exchange will have one less option: The state on Friday removed the not-for-profit Alameda Alliance For Health from its list of providers because it failed to meet the requirements to sell insurance on the commercial market.
The late change could send uninsured Alameda County residents scrambling to sign up with other providers before the Dec. 15 deadline to start receiving health care at the beginning of the year.
Alliance will continue to provide health coverage for more than 160,000 members, mostly on Medi-Cal, but the state said it wasn't ready to compete for more business on the exchange.
Figures weren't available on how many people had already used the exchange to sign up with Alameda Alliance For Health, a public, not-for-profit managed care health plan, since open enrollment began Oct. 1 -- one of the major initiatives under President Barack Obama's new health care law.
But those who chose Alliance still have time to select from a mix of plans from Anthem, Blue Shield and Kaiser Permanente, with service at a total of nine hospitals in the region.
Alliance was one of the Bay Area's four regional plans that were offered in addition to the state's major insurers, including Contra Costa Health Plan, Valley Health Plan in Santa Clara County and Chinese Community Health Plan in San Mateo and San Francisco counties.
Alliance did not meet a minimum financial solvency requirement to sell its plans on the exchange, according to the Department of Managed Health Care.
But spokeswomen at both Covered California and Alameda Alliance said they consider this to be a temporary setback that will be resolved in the coming months.
Leila Saadat, Alliance's chief strategy officer, said consumers should be able to buy a plan starting in January, but coverage wouldn't begin for another month.
Alameda County residents are eligible to sign up for Alliance plans, but Saadat said she does not know how many people have already done so through the Covered California exchange.
Anne Gonzales, a spokeswoman for Covered California, said the exchange won't know what those enrollment figures are until mid-November, when the exchanges release that data.
"Alameda Alliance has a solid provider network and is a valuable asset to the community," said Covered California Executive Director Peter Lee in a news release. "We look forward to the company getting its commercial license, so we can welcome its plans back to the exchange."
Removing Alameda Alliance from the exchange portfolio will not affect the calculation of federal subsidies, state exchange officials said.
Covered California said it notified Alameda Alliance in mid-October that a state-issued license was needed to sell health coverage and set a deadline of Oct. 31 for getting state approval. But Saadat said Alliance was unable to meet the deadline because it needs more time to address some issues related to new rates that it will be paid by the state.
Saadat said Alliance has 163,000 members, the majority of whom are on Medicaid, called Medi-Cal in this state. But with the expansion of Medicaid under the new health care law, she said the Alliance hoped to enroll another 45,000 eligible Medi-Cal recipients.
Alliance had targeted another 3,500 non-Medi-Cal recipients to sign up on the exchange, she said.
Contact Tracy Seipel at 408-275-0140. Follow her at Twitter.com/taseipel.