Journalism in the Public Interest

Q&A: How California’s Insurance Enrollments Beat

Covered California exec predicts peak enrollments in mid-December: “There will be some people who have price bumps. That is unfortunate.”

Covered California Executive Director Peter Lee (Max Whittaker/Getty Images)

There’s good news flowing from the Golden State — and Peter Lee has a lot to do with it.

Covered California, the state’s health insurance marketplace, signed up more people in October than, the federal Web site handling enrollment for 36 states.

During that month, 30,830 people enrolled in Covered California. By comparison, in the states that relied on, fewer than 27,000 people enrolled from Oct. 1 to Nov. 2.

“California’s Health Insurance Exchange Enrollment Says a Lot About What Could Have Been and What Still Has To Happen,” wrote insurance consultant Robert Laszewski.

“Calif. Offers Glimmer of Hope Amid Disastrous Obamacare Rollout,” wrote Real Clear Politics.

Lee, Covered California’s executive director, has set the tone for the exchange, traveling around the state to help promote it. Prior to being named to his position in 2011, he served as deputy director for the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services. He was also the longtime executive director and CEO of the Pacific Business Group on Health in San Francisco.

I spoke to Lee on Tuesday to talk about what California is doing right and wrong — and what’s ahead. The interview has been edited for length and clarity.

Q. Covered California is being cited as a model for what could have been if it got its act together. Do you agree?

A. Yes and no. We’re hardly perfect, and I’m not ready to declare success, but I’d say absolutely we’re in the game in a very positive way. When I think about what it takes for an exchange to be successful, it’s three things. It’s affordable products. It’s effective marketing and outreach and then effective enrollment. I think we’re doing pretty well on all three fronts. And on the enrollment side, it’s not just that we have a good functioning website. Literally we’re in the process of having upwards of 30,000 trained people across the state to help people enroll in person. That’s huge. I don’t have the hubris to say we have all the answers or we’re doing everything right, but in many ways, I think, we have our act together.

California, with a Republican governor (former Gov. Arnold Schwarzenegger) and a Democratic legislature said we’re going to set up an exchange that’s going to work as well as humanly possible for California consumers, and we’ve been working on that for the past two and a half years. And what we’re seeing today is the result of saying, “Let’s put our residents first.”

Q. It seems, based on the numbers you released last week, that Covered California is hitting its stride, with some 2,000 enrollments a day. Do you consider this a peak? And if not, what is your best guess of what a peak may look like?

A. It’s absolutely not the peak. I think that the peak is going to be in the period from Dec. 1 to Dec. 15 [the deadline to sign up for coverage that begins Jan. 1]. And I would anticipate we would be on a daily basis easily doubling, tripling, if not quadrupling, enrollment numbers from 2,000 a day. When you think about marketing and sales, generally you say that for most consumers, they need to be touched 10 times before they buy something. We’re selling insurance. We’re selling it with a financial subsidy. But even with that subsidy, consumers have to decide — it’s a purchase they’re making.

The people that enrolled in October are what I like to call ‘one touch people.’ These are people who’ve been waiting to get health insurance forever, who’ve said, ‘I’m going to jump on it.’ I think we’re far from peaking. We’re just starting the discussions around the country to get people talking about shopping and comparing their options.

Q. The issue of health insurance cancellations has received a lot of attention, including in California. My understanding is that contracts between Covered California and insurers offering products on the exchange requires that they cancel non-grandfathered policies that aren’t compliant with the ACA by Dec. 31. Why is that?

A. The plans wanted it in place because what they and we were worried about was that some plans would be selling in essence schlock coverage in November and December of this year. That would have a lot of [insured people] going through much of next year, which would have very substantially negative impacts on the risk pool, potentially leading to a much higher cost for lives in Covered California. We believe, and I believe rightly, that the products we are offering are good products at good prices.

Q. Given the president’s request that insurers allow consumers to renew these policies, will you change your approach?

A. We’re looking and will be talking with our board this Thursday about whether we should be making any change in what was a policy designed for the good of consumers. Clearly for those who don’t have insurance, there are millions who get subsidies for buying products. Let’s look at the 1.7 million people [with individual, non-group insurance policies in California]. About 800,000 of those are in grandfathered products, meaning they were issued before March 2010 [and consumers can keep them under the law]. About 900,000 are in non-grandfathered plans. Of those, about 300,000 are eligible for subsidies and will get a big leg up. Which leaves about 600,000. Some will see their rates go down; some of those who will see rate increases. There are two types. Some are individuals covered right now with what many would say is high-risk coverage. Coverage that is inexpensive because it won’t be there when you need it. There are also some people, it’s probably 100,000 to 200,000, who probably have pretty good coverage today that to get comparable coverage with their existing health plan are seeing rate increases. There will be some people who have price bumps. That is unfortunate. It’s always been the case that some individuals are going to see costs go up because we’re moving from a health insurance marketplace that is about risk selection and avoiding sick people to one that is about good health benefits for everybody.

Q. I wrote a story about a San Francisco couple who will face premiums that are double what they currently pay Kaiser Permanente and a benefit package that isn’t as rich. That sounds like a bad situation. Do you agree? What do you suggest consumers in such a situation do?

A. I don’t have an easy answer for them. Shop around. They can certainly do that. This doesn’t help them, but the interesting thing to note is that if they chose to not get insurance, they would not have a penalty. I know that’s not a happy story for them but it underlies one of the challenges that I think Congress should look at. Their insurance would cost them over 20 percent of their income. The standard of the Affordable Care Act for affordability is between 8-9.5 percent [of income]. The challenge that it raises is how does Congress look at improving the law to have issues like this fairly dealt with. This is as a very good example of our needing to have constructive improvements of what is the most dramatic change in health care since Medicare. It’s not a perfect law. The way to improve it is not to say it’s not working. For every story like that one, I’ve literally had thousands say, ‘This is the first time ever I’m going to get health insurance.’

Q. Covered California has not been without its share of problems. For one, there has been some criticism about the online doctor and hospital finder that was delayed and then incorrect on your Web site. Can you reflect on that?

A. We set a high bar at Covered California that is always centered around how to make what we do best for consumers. As you know I used to run the Pacific Business Group on Health to help the most sophisticated employers in the nation and the world buy health insurance for their employees. Virtually none of those large employers offered a consolidated provider directory for their employees. It’s our ambition to do that because it’s the right thing to do, but it’s not easy. What most employers say is if you want to know about your doctor, go to each of your health plans and check. I give us great credit that we set the bar high for providing consumer service. For turning the on switch without having kicked the tires of the system, I give us a demerit.  We are an organization that is the best of the private sector and best of the public sector. Part of that is being a learning organization.

Q. Are you where you thought you’d be seven weeks in? Would you say you’re on track?

A. I feel very good about where we are. Part of what I feel good about is I’ve spending a lot of time traveling around the state. We have huge positive interest and engagement throughout the state. I feel really good about that. I feel really good about 70 percent of the consumers who have enrolled through our Web site saying it’s easy. I feel very good about the fact that the people in communities who will be helping people enroll, there are over 5,000 that speak Spanish. I feel really good about that. And there’s plenty of things that I wish we had done better at. But all in all, I think we’re in a very good place right now. It’s all about getting people covered, but in the end, it’s about getting people health care. I’m excited about the new challenges we’ll have. It’s not just the enrolment numbers I’ll want to look at. I’ll want to look at the number of people getting preventive services. It’s not about Web sites. It’s about keeping people healthy. It’s about making sure that people get the right care at the right time.

Q. And finally, do you think you’re ready for a Jan. 1 start of coverage?

A. Absolutely. Will it be perfect? Absolutely not.

Quote:  The plans wanted it in place because what they and we were worried about was that some plans would be selling in essence schlock coverage in November and December of this year.

lolll…yeah, another laptop covered in coffee spit laughing at accurate reporting of an accurate assessment of reality.

I do wish the article’s author had asked “Who - what government department or business entity - actually wrote the software that is your website?”.

Had the answer been a business entity, then I would have concluded that California applied the same healthy distrust of business exhibited in the quote I pulled from the article to the business entity that was absorbing the taxpayers’ dollars in exchange for providing functionality - that is, standing on their necks until it was done right.

D.C., you see, is contaminated by “government should be run like a business…by business, and to profit business” in complete and utter disdain for “a government of the people, by the people, and for the people”.

So failed.

Robin Holding

Nov. 20, 2013, 4:25 p.m.

“The standard of the Affordable Care Act for affordability is between 8-9.5 percent [of income].”

Really? Does that mean that a self-employed hedge fund manager earning $65 million a year will be expected to pay from $5.2 million to $6.175 million per year in health insurance premiums? Of course not. Only we middle-class working stiffs are expected to fork over a retirement-destroying percentage of our income as “protection money” against bankruptcy.

Meanwhile, the Dow has hit 16,000, driven by the rising profits of such Dow stocks as Merck, Pfizer, Johnson & Johnson and UnitedHealthCare.

Well done, “Democrats.”

Sharon Andrews

Nov. 20, 2013, 9:09 p.m.

What, RH, does ACA affordability have to do with the stock market?

From the rest of your comments, it’s clear that there is nothing about the ACA that would ever satisfy you.  You’re a troll who gets paid to write garbage about the ACA on this website and probably other trash about the President or Democrats or whatever on other websites.  Millions and millions of people are literally dieing for affordable health care.  That you don’t care says a lot about you.

Robin Holding

Nov. 20, 2013, 9:55 p.m.

Alas, Sharon Andrews, if only I were just a silly Republican troll instead of a person facing the situation I am facing!

My spouse and I are a self-employed 50-something couple making more than $62,500 a year, and for us, the Affordable Care Act is a financial disaster. It has caused the cancellation of our current insurance, and the cheapest ACA-compliant plan available to us on our state’s exchange will increase our premiums by 92%, and our annual out-of-pocket maximum by 41%. After comparing notes with another couple in their 60s who have also reviewed their options on our state’s exchange, it is clear to us that our premiums will increase another 100% once we hit age 60. So what the ACA appears to have done is to have traded discrimination based on the condition of one’s health to discrimination based on age.

We fully support the expansion of Medicaid and the extension of affordable care to those with pre-existing conditions. We just think it should be done by means of progressive taxation, instead of by soaking middle-class Americans who are already in serious danger of never being able to retire. Ideally, we believe Americans deserve the same kind of actual health CARE (not just health “insurance” with a $12,700 annual out-of-pocket expense) that people in all other developed nations EXCEPT the US have had for decades. And we believe that if the President and the Democratic leadership in Congress had had the courage to fight for such a plan, we would have ended up with something a lot better than the Affordable Care Act—which is nearly identical to a scheme hatched at the right-wing American Heritage Foundation and which became the foundation for “Romneycare.”

If you can’t see the connection between forcing millions of Americans to pay sky-high premiums to for-profit insurance companies and the soaring stock prices of those same companies, then I don’t know what to tell you. But please note that unlike you, I did not resort to name-calling or dismiss your opinion as “trash” or “garbage.” If you have a personal story to share about your own experience with the health care system that might be helpful for others to read, perhaps you could share it here instead of just hurling insults at folks you happen to disagree with.

As a proud Californian, born raised and with no plans to leave, I endorse the Covered California program.  Though we do not have to enroll yet, when we do, it looks like we will save about $200 per month over what we currently pay.  We both have health issues and see our primary care physician about 6 times per year between us.
I made this comment on another site and was accused by some unknowing troll that effectively called the President a communist and that I was responding ‘right out of Pravda.’
As to paid trolls, I doubt it.

I have lots to say on this issue:
First, I am truly happy for those who were not able to afford coverage before and now they can.  I don’t think it was fair that someone who had a pre-existing condition would potentially have to go without health care for the rest of their lives.  There were definitely concerns that needed addressing, but I don’t know think the whole country’s healthcare should have been messed with in the process. 
It just seems apparent that many of the current insureds are paying the price for the new insureds, often very directly and often very substantively, through increased premiums and/or decreased benefits… and that just isn’t right!
Being told by Covered CA to “shop around” isn’t much consolation, especially when I was told by an insurance broker who works with many insurance companies that (as a result of the ACA) there are no longer plans with as good of coverage as mine available for comparable prices.  High quality comparable plans for a comparable price simply no longer exist.
Or as a supervisor at Covered CA told me:  It’s just like insuring a car.  The good drivers have to pay for the high-risk drivers. 
It feels like you’re being told you’re just an unfortunate casualty ... despite the fact that what it means to me is that, unless something changes, I likely will not have health insurance since there is no point paying thousands a year in premiums if I can’t afford to actually use the insurance.  I was hoping to be able to keep my current plan at least for another year, but I guess we’ll know sometime after the Thursday discussions mentioned whether that is an option.  And if we are given the option to keep our current plans for another year, I wonder what the premium increase will be?
The same guy quoted in this article, Robert Laszewski, was quoted in the Washington Post a couple weeks ago and said that there was an estimated 30% to 50% increase in baseline costs to insurers due to the ACA!!  I can see a direct correlation between that statement and my high-quality-with-superior-benefits health plan having been replaced with a more-expensive-yet-inferior “schlock” plan.  It is “Robbing Peter to pay Paul.”
I’ve also heard ad nauseum about pre-ACA plans being substandard, crap, garbage, schlock, however they want to describe it, but the fact is that for many of us those terms are better used to describe the post-ACA plans.
It’s also frustrating that the category of those who are on the losing end of the ACA is always described as being such a small percentage.  Regardless of the fact that for anyone it’s happening to, it’s 100%, the reality is that millions of people are being negatively affected by the ACA nationwide.  Even if it’s only 5% of the population, that’s still about 15 million!
This article mentions the potential of having Congress look at improving the law to fairly deal with these issues.  I hope that will happen, but I will not hold my breath.

How many were Medicaid?  Maybe 90%  LOL

I am also being cancelled and the plan offered has a higher out of pocket and higher copays. The premium is more than double what I paid before. I am 64 and retired. 8 months away from Medicare. Because I make a few dollars over $46k I don’t qualify for subsidy. I guess I will have to go without insurance for the first time in my life.
I am glad the ACA will help some people but it sure doesn’t help me.

I’m happy that Cali exchange is working. I’m still working on obtaining ACA. I make low wages but the exchange navigator said I was not eligible for a subsidy. I am trying to figure out what’s going on. The insurance is Blue Cross Proactive Plan Tier 1, it’s better then my present ins but $50.00 more a month and it would go over my limited budget. I thank you who shared your stories and I am sorry. I hope ACA can be fixed so all can get a good deal. I am also sorry that this has become so political Robin Holding, who is probably a caring, would be so nasty in her comments. Truth be told we know that big business, pharmacy & insurance companies, are going to benefit from ACA.

Robin Holding

Nov. 21, 2013, 1:15 p.m.

Hello, Stan…I’d be interested to know which of my comments you thought was nasty. I thought I’d done a pretty good job of not sinking to the level of the commenter who wrote unkind things about me.

I do believe it’s appropriate to express anger over the growing inequality in this country and the fact that the very, very wealthy do not pay their fair share of taxes. For example, a hedge fund manager pays only a 15% capital gains tax on the millions that he makes each year. A self-employed couple making $100K pays a 15.5% payroll tax on 100% of their income PLUS a graduated income tax. It’s also appropriate to be angry about the hypocrisy of those in Congress who say they want to help the middle class, but pass laws that benefit only their wealthy Wall Street donors. But I try to avoid attacking anyone personally in my comments (or calling their opinions “garbage”) which really contributes nothing to a discussion.

Ellie Dempster

Nov. 24, 2013, 4:51 a.m.

My husband Steve is only 59 years old, and next year he will have to come off our group plan and go onto and individual medicare supplement plan.  He has been disabled since 2009, and was eligible for Medicare part A & part B in 2011.
    When I tried to get prices for the medicare supplement plan in 2014 I was told the F plan would normally be only $110.00 for a normal healthy 65 year old, but because my husband will be only 60 years old and not 65 and has pre existing conditions and is disabled he will have to pay $350.00 per month for the same exact plan.
    How can this apply to the new law?  The new law states in 2014 that health insurance plans cant refuse to cover you or charge you more just because you have a pre existing health condition.
    Then why are they charging my husband more money?  Does the new law not apply to all Disabled Americans who are not 65 years old who are younger and need a supplement to their medicare plan?
  I called HealthCare.Gov, and they did not know, they told me to call Medicare.  I called Medicare and they did not know anything about the prices on medicare supplement plans, and they could not help me.
      There are so many millions of Disabled Americans who are younger than 65 and are in need of a policy to cover what medicare does not and why the law does not help these people is just crazy!!!  The people that need it most who are disabled get no help from this new law?

If you have any questions or comments please call me at 805-409-6052 or 805-523-0565.


Mr & Mrs. Steve & Ellie Dempster

Hans Giesholt

Nov. 24, 2013, 6:22 p.m.

Nothing is free. It is probably true most in CA signed up for Medicaid. Premiums are wat too expensive under ACA. Wait till next year when premiums will sky rocket when small businesses are forced to sign up. ACA is a loser program period. Never made sense,math doesn’t work. The really sad part is that health insurance should have had a national consensus, American people should have had input instead of bad legislation giving health insurance companies full control of ones healthcare, and insurance companies bailed out, shift to part time workers instead of full time. Just a bad idea to complete change health insurance with a massive bill for a few little tweaks. Just nit smart. More people will be hurt than helped by ACA. Really bad idea and law that was crammed down all Americans throats.

Ellie, call your congressman for help. I called congressman and someone from his office is helping me, plus they gave me the # for a rep who is also working on my case. I’m hoping I get a positive outcome.

Mr. Laszewski’s blog post from today called Trying to Make Sense of Covered CA’s Numbers actually says he thinks CA will end up having fewer people insured as a result of this whole fiasco:

Let’s see how this has worked out for me and many more like me:
I currently have affordable/quality health insurance. As a result of the “Affordable” Care Act, as of 1-1-14 I will no longer have affordable/quality health insurance.  I am currently covered in CA.  As a result of the ACA and “Covered” California, as of 1-1-14, I will no longer be covered in CA.

I’m sure the insurance companies are happy Covered CA is not extending current policies for another year and that the insurers will be more than happy to start supplying their existing customers with the post-ACA substandard plans with increased premiums. Since the ACA mandates are costing the insurers so much of their profits, they’ll surely be happy to recoup some of the profits by upcharging the rest of us.

why isn’t the sign up page a .gov site? Thought all government sites including were set up that way, why is this a .com site? it looks phoney

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