RENEE MONTAGNE, HOST:
California would seem to be an Obamacare success story, but even their insurance options depend on where you live. One major insurer decided not to sell on the exchange in some areas, leaving nearly 30,000 Californians with few options for health insurance. Pauline Bartolone from Capital Public Radio in Sacramento has more on that decision by Blue Shield and its repercussions.
LORI LOMAS: OK. So now I find out what my hold time is going to be.
PAULINE BARTOLONE, BYLINE: Lori Lomas has been selling insurance in rural Northern California for over 20 years, and she spends a lot of time on the phone with insurers and Covered California.
LOMAS: There are 101 callers ahead of me in the queue. (Laughter).
BARTOLONE: When she started running quotes for people through the exchange website, she noticed that in some areas, only one insurer popped up.
LOMAS: There used to be at least two, and now one company has pulled out. And so many areas have no choice at all between insurance companies.
BARTOLONE: In 2013, Blue Shield of California sold policies to individuals in every California county. But the company pulled out of 250 zip codes in 2014. The coverage gaps are particularly felt in Northern California where no new carriers stepped in on the exchange. So now thousands of people from the border of Oregon to the Sierra Nevada mountains have only one carrier in Covered California. Lomas says that's unfair.
LOMAS: I have had clients from other areas of California. They live in the Bay Area or here or there, and I do it for them and wow, look all the choices that pop up. There's six insurance companies or seven insurance companies. And I think that was when I first realized, you know, how truly we were getting the shaft up here.
BARTOLONE: Blue Shield of California declined an interview, but it said its goal is to keep health premiums low. So the company says when it offered doctors certain rates to keep plans affordable, not enough providers accepted the payment amount. That's when the insurer decided not to sell policies in areas where there's no contracted hospital nearby.
SHANA ALEX CHARLES: There's no public charge that says that they have to be in the zip code.
BARTOLONE: Shana Alex Charles is Director of Health Insurance Studies at the University of California Los Angeles.
CHARLES: And if they determine that it's not in their company's best interest to remain there and sell their products there, then they won't be there.
BARTOLONE: That's generally allowed under the federal health law. Plans don't have to sell in an entire state, for example. Consumer advocates say part of the problem, though, may be the lack of doctors in rural areas, and insurers shouldn't sell policies where there isn't a good network. But UCLA's Charles says consumers lose when there's not many insurers to choose from.
CHARLES: Competition breeds choice, and people who are competing against each other work to try and make the consumer the most happy as possible so that the consumer will then choose them. Competition in the marketplace is a good thing and that it does keep companies in some sense honest.
BARTOLONE: Two other companies are selling in Northern California but not on the exchange. So if consumers choose those plans, they can't get subsidies offered through the health law. For NPR News, I'm Pauline Bartolone in Sacramento.
MONTAGNE: That story is part of a reporting partnership with NPR, Capital Public Radio and Kaiser Health News.