California’s independent health insurance purchasing pool for small businesses will close at the end of the year because too many health plans have pulled out. Pacific Health Advantage, commonly called PacAdvantage and based in San Francisco, is notifying 6,200 employers and 116,000 workers that their coverage ends Dec. 31. PacAdvantage officials said in a statement that the pullout of three major health plans—Kaiser Permanente, Blue Shield of California, and Health Net of California—prompted the closure. In 1994, 10 health plans had participated.
The purchasing pool was created by the state in 1992 and taken over in 1998 by the Pacific Business Group on Health to help keep health insurance affordable and available for employees and owners of small businesses. The pool was open to employers with two to 50 employees. Peter Lee, CEO of PBGH, said every effort was made to maintain the health plans’ participation. “Unfortunately, market forces kept that from happening,” he said in a statement.
