Home California Covered California’s Board Adopts New Budget

Covered California’s Board Adopts New Budget

by ECT
  • Covered California’s board adopted a $350 million budget that highlights the agency’s sound financial footing in the face of continued uncertainty and does not rely on state or federal funds.
  • The balanced budget continues significant investments of $107 million in marketing and outreach to promote enrollment and maintain a healthy mix of consumers.
  • Analysis shows the removal of the individual mandate penalty could result in up to 240,000 consumers becoming uninsured.
  • Covered California’s board elected a new chair to help oversee the largest state-based marketplace in the country.

SACRAMENTO, Calif. — With California’s uninsured rate at a record low, Covered California’s Board of Directors adopted a $350 million budget for fiscal year 2018-19 that highlights the agency’s ongoing strength and stability. The budget calls for continuing significant investments in marketing and outreach that are critical to promoting enrollment and maintaining a healthy consumer pool, which helps keep premiums low for everyone in the individual market.

“This budget keeps Covered California on the path of building on a competitive marketplace that puts consumers first,” said Peter V. Lee, executive director of Covered California. “Covered California is on strong financial footing and well positioned to be nimble and responsive to the ongoing uncertainty that continues at the federal level.”

The budget includes $340 million for operations and funding for a capital-projects reserve of $10 million. The operating budget includes the following highlights:

  • Balanced Budget: The fiscal year (FY) 2018-19 budget is balanced and relies solely on the funds collected from our qualified health plans and does not include any state or federal funding. Covered California expects to begin FY 2018-19 with approximately $310 million in reserves, which is the equivalent of about 11 months of operating expenses.
  • Significant Investment in Marketing and Outreach: Allocates $107 million for marketing and outreach and sales. This investment is critical to promoting enrollment and retaining consumers, which is necessary for maintaining a healthy mix of consumers and helping keep premiums low for everyone.
  • Improved Customer Service: Allocates $105 million for the service center and the new Consumer Experience Division.
  • Lowers Health Plan Fees: Lowers the health plan assessment rate to 3.75 percent from the 4 percent assessment levied in 2017 and 2018. Since the cost of these assessments is spread across the entire individual market (both on-exchange enrollment and the mirrored products that consumers purchase directly from Covered California’s 11 carriers off the exchange), this rate will equate to a 2.3 percent assessment on individual market premiums in 2019.

The budget also includes an analysis of the potential impact that the removal of the individual mandate penalty may have on Covered California’s enrollment. Covered California currently has 1.4 million actively enrolled consumers, and the analysis estimates that between 94,000 and 243,000 could go uninsured due to the removal of the penalty.

“You never know what is going to happen, and consumers who go without health insurance will be taking a gamble that they will not end up injured or sick with hundreds of thousands of dollars in medical bills,” Lee said. “Life can change in an instant, and we do not want to roll back the historic gains we have made over the past five years.”

Since its inception, Covered California has worked with Medi-Cal to dramatically improve access to quality health care in the state. Since 2014, nearly 5 million people have enrolled in Medi-Cal due to the Patient Protection and Affordable Care Act expansion, and more than 3.5 million have been insured for some period of time through Covered California.

Together, the gains cut the rate of the uninsured in California from 17 percent in 2013 to a historic low of 6.8 percent at the end of 2017.

Click here to read Covered California’s Fiscal Year 2018-19 Budget: http://hbex.coveredca.com/financial-reports/PDFs/CoveredCA_2018-19_Budget-6-15-18.pdf.

On Thursday, Covered California’s board also elected a new chair to help oversee the agency. In a 5-0 vote, the board elected Mike Wilkening, the new secretary of the California Health and Human Services Agency (HHS), to serve as chair.

“It’s a privilege to serve with this great group of Board members and work with Peter and the very talented staff at Covered California,” Wilkening said. “California has been an example of the potential of the Affordable Care Act, so I’m looking forward to continuing that, and to build on the successes we’ve had, but then also squarely facing the challenges that we have ahead in the coming years.”

Wilkening was appointed to HHS secretary in May. He leads 12 state departments and more than 30,000 employees. He replaces Diana Dooley, the outgoing HHS secretary, who was recently appointed to be Gov. Jerry Brown’s executive secretary.

“Welcome aboard. While we will miss Secretary Dooley’s leadership, we are eager to get started working with you,” Lee said. “This board has had an extraordinary relationship working with the California Health and Human Services Agency and we are excited for that to continue.”

Right now consumers can enroll through Covered California’s special-enrollment period if they have a qualifying life event, like losing their coverage or moving. For more information on special-enrollment rules, visit http://www.CoveredCA.com/individuals-and-families/getting-covered/special-enrollment. Applicants have 60 days from the date on which the qualifying life event happens to enroll in a plan through Covered California.

Those who qualify for Medi-Cal may enroll through Covered California year round.

Eligible consumers who are interested in signing up should go to www.CoveredCA.com where they can get help to enroll. They can explore their options and find out if they qualify for financial help by using the Shop and Compare Tool. They can also get free and confidential enrollment assistance by visiting www.coveredca.com/find-help/ and searching among 800 storefronts statewide, or more than 17,000 certified enrollers who can assist consumers in understanding their choices and enrolling, including individuals who can assist in other languages. In addition, consumers can reach the Covered California service center by calling (800) 300-1506.

About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

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