News Release

Date Posted

Covered California’s Board Adopts New Budget and Elects California Health and Human Services Secretary Mike Wilkening to Serve as Board Chair


  • 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.

Covered California Wins Creative Award for Second Consecutive Year for Reaching Out to Underserved Spanish-Speaking Audience


  • The “Soccer” Spanish radio spot was developed to promote special enrollment for those who lost or may be losing their health insurance.
  • Click here to listen to the award-winning spot, which has been heard 3.4 million times ahead of the World Cup.
  • Loss of health insurance during the year is the number one reason people sign up for coverage during Covered California’s special-enrollment period.

SACRAMENTO, Calif. — For the second year in a row, the Radio Mercury Awards honored Covered California for its creative marketing, this time for an ad titled “Soccer.” The Spanish-language radio spot was developed to air prior to the 2018 FIFA World Cup to inform consumers that they are eligible to sign up for health care coverage during Covered California’s special-enrollment period if they have lost, or will be losing, their health insurance.

In a format that resembles the narration of a soccer game, the spot features a commentator repeating the phrase “¡Perdiste tu seguro!” (“You lost your insurance!”). The spot ends by saying, “Es difícil pensar en otra cosa cuando pierdes tu seguro médico. Por eso Covered California te da la oportunidad de solicitar un nuevo plan de salud si perdiste tu cobertura.” (“It’s hard to think of anything else when you lose your health insurance. That’s why Covered California gives you the opportunity to apply for a new health plan if you lost your coverage.”)

Traditionally, the World Cup has a large audience with Latinos. The campaign started in March and is ongoing, airing on Pandora, Spotify, iHeartRadio, Univision, Entravision and other digital platforms, as well as prominent Spanish-language radio stations in Los Angeles and the Riverside-San Bernardino area. Covered California estimates the ad has been listened to 3.4 million times.

“This ad is part of our ongoing efforts to promote special enrollment for specific communities throughout the state in ways that carry messages tailored to them in the language they feel comfortable speaking. We want to offer them content that is culturally relevant: in this case, our Spanish-language message anchored in the World Cup,” said Peter V. Lee, executive director of Covered California. “We’re proud of getting this award, but even prouder of the fact that this ad has been heard more than 3 million times to reinforce the fact that we’re there for consumers year round.”

To hear the “Soccer” spot, visit the Radio Mercury Awards page at http://radiomercuryawards.com/2018Winners.cfm.

The ad was produced by Casanova-McCann, a marketing subcontractor engaged by Covered California to work in partnership with prime contractor Campbell Ewald to reach broad audiences in California, including Spanish-speaking Latinos.

The Radio Mercury Awards were established in 1992 as “the only competition exclusively devoted to radio… to encourage and reward the development of effective and creative radio commercials.” The competition draws entries from advertising agencies, production houses, radio stations and educational institutions across the country.

Californians may enroll during Covered California’s special-enrollment period if they have a qualifying life event, like losing their coverage. The loss of health insurance is the number one reason people sign up for coverage outside of the traditional open-enrollment period.

Special enrollment for health insurance through Covered California continues until the fall, when open enrollment begins. At that time, individuals can get financial help to buy health insurance without a qualifying condition.

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.

Covered California Launches New Campaign Focused on College Graduates to Make Sure They Get Health Coverage


  • Commencement speakers will remind thousands of new graduates that “life can change in an instant” – making it important for them to have health coverage, so they can get the health care they need as they set out in life.
  • A new video distributed on social platforms will remind graduates who may be losing their health coverage to check out Covered California for affordable options.
  • Covered California Executive Director Peter Lee congratulates graduates and reminds them to protect their futures by getting health insurance.
  • Covered California provided more than 70 campus health centers with materials to educate graduating students about new health insurance options available through Covered California.
  • The “special enrollment” campaign for graduates is launching amid new data showing California’s uninsured rate is at an all-time low.

SACRAMENTO, Calif. — Graduation season is in full bloom and Covered California is joining with commencement speakers throughout the state to remind the over 400,000 graduates and their families not to forget about the importance of health insurance during this busy time of year.

“Congratulations graduates for everything you have achieved,” said Peter V. Lee, Executive Director of Covered California. “As you prepare to move on to the next stage of your life, be sure to protect the one thing essential to pursuing your dreams — your health. We want to remind everyone that if you’re losing your coverage after graduation you could qualify for special enrollment through Covered California.”

Californians may enroll during Covered California’s special-enrollment period if they have a qualifying life event, like losing their coverage. For example, students who had their health care needs provided by their school and are losing that coverage upon graduation, or who will lose coverage through their parents’ plan when they turn 26, are eligible to sign up for a new plan through Covered California.

There are currently more than 250,000 Californians between the ages of 19 and 29 enrolled in a plan through Covered California, and they are receiving affordable, name-brand insurance coverage.

Covered California is being joined by commencement speakers from across the state who are weaving the importance of getting and keeping coverage into their remarks. Among those who have agreed to participate are commencement speakers at California State University - Los Angeles, the University of California at Irvine and the University of California at Merced have agreed to carry the message to graduates in their speeches.

“Taking care of their health gives graduates the freedom to pursue their dreams, so we want to make sure they are covered,” said Cástulo de la Rocha, President and CEO of AltaMed Health Services, who delivered commencement speeches at Cal State Los Angeles. “These graduates may be working at a start-up or small business, or going into business for themselves, and regardless of which path they take, they will need health insurance. Whether they qualify for Medi-Cal or a subsidized insurance plan, Covered California can help them get into the plan that’s right for them.”

Mr. de la Rocha was joined by another commencement speaker, Dr. Kenneth Kizer – who is the Director of the Institute for Population Health Improvement at the University of California, Davis and the former director California’s Department of Health Services – to co-author an op-ed which has been sent to 96 college newspapers throughout the state (read the Op-Ed here: https://www.coveredca.com/news/pdfs/SEP_Graduation_Op_Ed_Final.pdf).

In addition, Covered California is collaborating with colleges and universities to promote the value of health insurance, sending more than 70 campus health centers educational materials to help inform students about their health care options. Covered California is also promoting special enrollment through its social media channels and a direct email campaign (see example social media image to the left).

At a recent graduation ceremony for California State University, Sacramento, Covered California spoke with graduates about their health care plans.

“We asked them a simple question: What are your plans for health insurance once you graduate?” Lee said. “Graduates knew they needed insurance, but many did not know where to turn. We want to make sure every graduating Californian knows about their options, including Covered California.”

Click here to see Lee’s congratulatory message for graduates: https://vimeo.com/271777243/6f94989b59.

Click here to see a video of recent graduates talking about health care coverage: https://vimeo.com/271754351/a43ad72561.

This outreach campaign comes on the heels of a new report from the Centers for Disease Control and Prevention that shows California finished 2017 with a record-low uninsured rate of 6.8 percent, down from 7.2 percent at the end of 2016. California’s good work at lowering the rate of uninsured is happening when the national rate of uninsured is showing an increase. The state uninsured rate stood at 17 percent in 2013, the year before the exchange began offering coverage through the Patient Protection and Affordable Care Act (see the complete report here: https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201805.pdf)



“Covered California is proud to be part of the effort to help millions of Californians get the coverage and care they need,” said Lee. “We will continue to invest in reaching out to every corner of the state to make sure Californians know about their health care options and the financial help available through Covered California.”

During the recently completed open-enrollment period, 85 percent of Covered California enrollees received some level of financial help. Nearly 60 percent of subsidy-eligible enrollees have access to Silver coverage for less than $100 per month, and 74 percent can purchase Bronze coverage for less than $10 per month.

Special enrollment for health insurance through Covered California continues until Oct. 15, when open enrollment begins. At that time, individuals can get financial help to buy health insurance without a qualifying condition.

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.

Covered California Analysis Shows Major Declines in New Enrollment Nationally and Identifies Policies That Could Lower Premiums in 2019

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  • Enrollment in the federally facilitated marketplace has dropped 9 percent over the past two years, with a nearly 40 percent drop in new enrollment, while enrollment in state-based marketplaces remained steady during the same period.
  • Early data on off-exchange enrollment indicates that an additional 1.6 million unsubsidized middle-class Americans also left the off-exchange market over the past two years.
  • Increased federal investments in marketing and outreach, from assessments collected for that purpose, could reduce premiums by 3.2 percent from 2019 to 2021 and save Americans $6.6 billion in premiums.
  • Failure to act within the next few months will directly contribute to premium increases that could exceed 30 percent in many states in the federal marketplace.

SACRAMENTO, Calif. — A new Covered California analysis finds enrollment in the federally facilitated marketplace (FFM) has dropped 9 percent over the past two years, driven by a nearly 40 percent drop in new enrollees, while the number of consumers signing up for coverage through state-based marketplaces (SBMs) has remained steady over that time.

The report, Individual Insurance Markets: Enrollment Changes in 2018 and Potential Policies That Could Lower Premiums and Stabilize the Markets in 2019, finds that the dramatic decrease in new enrollees in the federal marketplace, which coincides with decisions to pull back on marketing for federal marketplace states, will likely mean a less-healthy consumer pool and higher premiums to cover the sicker enrollees.

“Enrolling new consumers every year is critical to maintaining a healthy consumer pool and keeping premiums low,” said Peter V. Lee, executive director of Covered California. “The drop in new enrollees at the federal level is deeply concerning and can be tied directly to recent policy decisions to not spend resources available to promote enrollment — leading to increased premiums for millions of Americans who do not get federal subsidies.”

Lee noted that the administration canceled its marketing during the last week of open enrollment in 2017 and then dramatically scaled back its marketing and outreach efforts during the most recent open-enrollment period.

“We are seeing the results of the federal decision to cut marketing by 90 percent: fewer people enrolled, a sicker consumer pool and higher premiums that could leave many — particularly those who do not get any financial help — priced out of coverage,” Lee said. “With health insurance companies making decisions in the coming months about whether to participate in 2019, and what to charge, the time is now to take action to protect millions of consumers from unnecessarily high rates.”

Similar to Covered California, the FFM has collected revenue from its health plan assessment — amounting to $1.2 billion in 2018 — that does not require any appropriation and can be used in a variety of ways. Covered California allocates one-third of its assessment revenue to marketing and outreach, and if FFM did the same, it would invest more than $400 million, which should lower premiums by 2.3 percent in 2019 and save consumers and taxpayers $1.6 billion. Maintaining this investment over three years would lower premiums by an average of 3.2 percent and save an estimated $6.6 billion during that time.

“Insurance needs to be sold, and it does not make any sense to let that money go unused when millions of Americans are at risk of higher premiums,” Lee said. “The administration needs to act like a business and recognize that now is not the time to continue its policy of cutting back on marketing, which will directly result in higher premiums for millions of middle-class Americans.”

A previous Covered California analysis found that in the absence of Congressional action, premium increases in the individual markets will likely range from 12 to 32 percent in 2019 and cumulative premium increases from 2019 to 2021 will range from 35 percent to more than 90 percent in some states. (Read the full analysis here: https://coveredcanews.blogspot.com/2018/03/national-analysis-projects-2019-premium.html.)

While subsidized consumers would be insulated from premium increases, which would also increase the amount of financial assistance they receive, unsubsidized consumers would bear the full weight of the higher premiums. Covered California previously estimated that 6 million Americans on the individual market, both on- and off-exchange, do not receive subsidies and have a median income of $75,000.

Covered California noted that in addition to restoring and increasing investments in marketing and outreach, there are other policies that could protect consumers from significant premium increases. They include funding a state-based reinsurance program and expanding the existing subsidy program to make coverage more affordable for consumers.

Covered California sent the analysis, along with a letter detailing Covered California’s observations and experiences, to Secretary Alex Azar of the U.S. Department of Health and Human Services and Administrator Seema Verma of the Centers for Medicare and Medicaid Services.

View a copy of the letter: https://www.coveredca.com/news/pdfs/04-25-18-CoveredCA-AzarVermaLetter.pdf.

Read the full analysis: http://hbex.coveredca.com/data-research/library/CoveredCA_2018_Individual_Market_Enrollment_4-25-18.pdf.

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.

Covered California Names Terri Convey New Director of Its Outreach and Sales Division


·         Convey will oversee Covered California’s sales strategy in both the individual and small-business markets.
·         She will lead Covered California’s Outreach and Sales Division to promote in-person enrollment, which supports more than 17,000 certified enrollment assisters and 800 storefronts across the state.
·         Convey brings extensive experience to Covered California, having previously worked as Aetna’s sales director for strategic initiatives and contact-center solutions, along with Humana and Coventry Health Care.

SACRAMENTO, Calif. — Covered California Executive Director Peter V. Lee announced the board of Covered California’s appointment of Terri Convey as the director of the Outreach and Sales Division.  

Convey will oversee Covered California’s sales strategy in both the individual and small-business markets, including working with thousands of insurance agents and other certified enrollers to ensure Californians have in-person assistance. She will also promote efforts to encourage consumers to keep their coverage once enrolled and renew their health insurance plans. The field sales program includes Covered California Certified Insurance Agents, Navigators and agency staff.

Convey arrives at Covered California from Miami, Florida, where she has been a high-ranking officer with Aetna, Humana and Coventry Health Care. She has worked in the health care industry for almost three decades.

“Terri’s years of experience in health care — including her work as the sales director of individual and public exchange for Aetna in Florida — make her a perfect fit for Covered California,” Lee said. “She has worked extensively with brokers, agents, sales teams and service center employees.”

Convey will lead Covered California’s system that supports in-person enrollment and works with more than 17,000 certified assisters who help consumers understand their health insurance choices and sign up for coverage.

Covered California’s robust enrollment network includes more than 14,000 independent insurance agents, who work in neighborhoods across the state and speak a variety of languages, and more than 800 privately run storefronts where consumers can get free and confidential assistance.

Covered California provides agents with field-based outreach support staff, enhanced training and communications programs, a certified agent and enroller service center, a storefront and events program, a mobile-enhanced consumer-referral tool and access to branded collateral. Effectively supporting the certified enroller community across the state has been critical to successful enrollment efforts and has led to more than 50 percent of all consumers being enrolled with the support of person-to-person assistance from agents and other enrollers.

Convey will also be tasked with continuing the growth of Covered California for Small Business, which has experienced a double-digit membership increase for the third consecutive year. Currently, more than 43,000 individuals have insurance through Covered California for Small Business, representing a growth of approximately 27 percent in membership from the previous year.

Convey graduated from the University of Miami with a Bachelor of Arts degree in English and has worked in health plan sales since 1989. After spending the first half of her career in large-group sales, she has held management roles in small-group and individual sales since 2003 and was intricately involved with Aetna’s efforts on Florida’s exchange through last year. The annual salary for Convey’s position is $189,996 and she will be reporting to Chief Deputy Executive Director Doug McKeever. She will start at Covered California on April 2.
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.

National Analysis Projects 2019 Premium Hikes of 30 Percent in Some States and Cumulative Increases of 90 Percent or More in the Next Three Years


  • Due to ongoing federal uncertainty, premium increases for every state could range from 12 to 32 percent in 2019.
  • The cumulative premium increases from 2019 to 2021 could be between approximately 35 and 90 percent.
  • Due to specific conditions unique to their region, 17 states are at greater risk of experiencing cumulative premium increases of 90 percent or more, and an additional 19 states could be at risk of experiencing hikes of 50 percent or more.
  • Several policy actions at the federal and state level, including reinsurance, could reduce premium increases and help millions of middle-class Americans maintain their coverage and access.

SACRAMENTO, Calif. — A new analysis finds that every state in the nation is at risk for higher than normal premium increases due to continued policy changes and uncertainty at the federal level. In the absence of any federal action to address the current environment, the report estimates that premium increases across the nation could range from 12 to 32 percent in 2019 and have a cumulative premium-increase total between 35 and 94 percent by 2021 (see Table 1: National Projections of Individual Market Premium Changes: 2019-2021).

“The challenges to our health care system are threatening to have real consequences for millions of Americans,” said Peter V. Lee, executive director of Covered California, the sponsor of the study released today. “The prospect of 30 percent premium increases in 2019 and hikes of over 90 percent over the next three years threatens access to coverage for millions of Americans.”

Table 1. National Projections of Individual Market Premium Changes: 2019-2021


The analysis, “Major Indicators of Individual Market Stability Highlight High Premium Increases for States in Coming Years,” (http://hbex.coveredca.com/data-research/library/CoveredCA_High_Premium_Increases_3-8-18.pdf) is a national economic analysis of potential premium increases, state-by-state impacts and estimates of positive effects of federal policies. The report was informed by actuaries at health insurance companies and academics at the University of California, Los Angeles; the University of California, San Diego; and Harvard University, as well as a review of recent published reports. In addition, Milliman provided actuarial modeling related to the potential impact of instituting a federal state-based invisible high-risk pool or reinsurance program. The analysis was sponsored by Covered California as part of its efforts to understand future trends and inform the national policy discussion.

Milliman’s complete report on the potential impact of reinsurance can be found here: http://hbex.coveredca.com/data-research/library/Milliman_Reinsurance_Program_Estimates_2-14-2018.pdf.

The analysis also identifies steps that can be taken to reduce the risks of these significant premium increases. Among the solutions is an analysis of the positive impact that a federal reinsurance program could have in 2019 if implemented soon.

“We project that a nationwide reinsurance program with annual funding of $15 billion could result in average premium reductions of 16 to 18 percent,” said Robert Cosway, consulting actuary at Milliman. “Lower premiums would affect both consumers and the amount that the federal government pays in the form of tax credits. The marginal cost of the reinsurance program would be much lower than $15 billion when you consider the reduction in the cost of the federal government’s tax credit payments.”

Previous Covered California analysis has shown that because reinsurance programs result in lower premiums and lower expenditures for premium subsidies, a program funded with $15 billion would have a net cost to the federal government of only $5 billion due to reduced Advanced Premium Tax Credit spending.

Other policies that could reduce premiums or promote stability include a return to providing direct federal funding for the required cost-sharing reduction subsidies, which help low-income consumers with lower copays and deductibles. Increased spending in federal marketplace states on marketing to promote enrollment among healthier individuals would yield a very positive return on investment, with the beneficiaries of that investment being federal taxpayers. New state policies could promote enrollment and protect consumers from new health insurance products that have huge gaps in coverage and may siphon off healthier people from individual market risk pools.

In addition to the projected premium increases, the analysis uses key indicators of marketplace stability to assess which states are more or less likely to be at risk of experiencing catastrophic rate changes.

According to the report, every state is at risk of cumulative premium increases of at least 35 percent over the next three years. Seventeen states could face premium increases exceeding 90 percent during that time, and an additional 19 states could face increases of 50 percent or more. These increases could be due to a variety of factors, including the recent decision to remove the federal penalty for being uninsured, the administration’s attempt to introduce new short-term plans that may damage the overall risk mix of consumer pools by siphoning off healthy consumers, and the continued underinvestment in federal marketing and outreach.

“We commissioned this work to shed light on the variation in the potential impact of policy changes such as the removal of the penalty, cuts in marketing in federal marketplace states and new products like association health plans and short-term, limited-duration health plans,” Lee said. “Health care is local, and the impacts of changes in federal policy will play out differently across the nation. The conclusion is that there are no ‘winners’ — rather, the range of impacts is from bad to very bad.”

Using key risk indicators to help gauge the overall health of a marketplace, the analysis examined the situation each state faces based on its risk score and enrollment trend.

  • Centers for Medicare and Medicaid Services (CMS) risk score: Measures the overall health of the consumer pool in the state’s individual market — based on the individual’s demographic and health-status information — and how it compares to the national average. A negative number means the consumer pool is healthier than the national average.
  • Enrollment trend: The number of consumers enrolled in a marketplace plan. While there are many ways to look at trend, for the purpose of simplicity this analysis examined the change between 2017 and 2018 enrollment.

When taken together, these “risk indicators” provide strong signals of whether a state will be more or less likely to have higher premium increases and market instability.

While subsidized consumers would be insulated from these increases, which would increase the amount of financial assistance they receive, unsubsidized consumers would bear the full weight of the higher premiums. A previous Covered California study estimated that 6 million Americans on the individual market, both on- and off-exchange, do not receive subsidies and have a median income of $75,000.

“Lower-income Americans will be largely shielded from these price hikes, but the real-world consequence for middle-class Americans who do not receive any financial assistance in the form of tax credits is that many will be priced out of having health insurance,” Lee said.

The analysis, which provides a snapshot and projection for potential premium hikes for each state, is available in an interactive map: http://hbex.coveredca.com/data-research/data-viz/individual-market-risks-by-state-2019/.

Figure 1: National Overview: State-by-State Interactive Mapping of Premium Increase and Instability Risk

The report finds that all states are at risk of high cumulative premium increases over the next three years, but based on the two indicators, the relative risk of increase differs.





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.

Statement: Covered California’s Executive Director Addresses Harvard Study on Impact of Eliminating Individual Mandate on Enrollment and Premiums

SACRAMENTO, Calif. — Covered California Executive Director Peter V. Lee issued the following statement in connection with the Harvard Medical School Study, “Eliminating the Individual Mandate Penalty in California: Harmful but Non-Fatal Changes in Enrollment and Premiums,” published in Health Affairs. The Harvard study, conducted by a team lead by Dr. John Hsu, is the first national effort to measure the potential impacts of removing the individual mandate penalty based on surveying actual California consumers about their likely actions in the face of there being no penalty.

“The removal of the individual mandate penalty could result in 378,000 fewer Californians with health insurance in the individual market, including approximately 250,000 who are currently insured through Covered California. The drop in those with insurance would be even greater because there would also be drops in Medi-Cal, California’s Medicaid program, since consumers often find out they are eligible for Medi-Cal while shopping for coverage through Covered California. While California would continue to have a stable individual market, and we have the reserves and flexibility to adjust for this impact, the impacts would be real and significant for California’s consumers. Californians would be paying increased premiums, and some of those who go without insurance could face big medical bills when unforeseen health events occur.

“The consumers who leave the market would be rolling the dice, hoping they would remain healthy, but the fact is that many of them will lose that bet. We know that life can change in an instant, and an illness or injury can be a moment away for all of us. While we all think we won’t be the ones to get sick or injured, the reality is that if 378,000 Californians decide to go without insurance, about 60,000 of them (one out of six) are likely to need medical care that will cost them more than $10,000. The real penalty is not what the IRS will collect through the coming year for being uninsured, but rather showing up at the hospital with no insurance and leaving with a massive debt.

“In addition, with a less-healthy consumer pool, California’s individual market could be facing premium increases for 2019 of 12 to 16 percent — with the biggest driver being the removal of the individual mandate. Increases at this level are bad news for consumers, but Californians would be in better shape than most of the nation would be. This study finds that four out of five Californians would opt to keep their coverage even with the penalty going away, and here we will once again be leaning in with a major marketing campaign to promote enrollment.

“The impact in many other states, however, is likely to be far worse. The removal of the penalty in those states will be compounded by the absence of effective marketing and the prospect of new skimpy insurance products, which would cause healthier people to leave the individual market. Premiums in many states could spike 30 percent in 2019 alone, with large increases in future years absent effective federal or state policies.

“While consumers who receive financial help — in California and across the nation — would be shielded from those rate changes, unsubsidized consumers would have no such protections. These are middle class Americans with a median income of $75,000 — approximately 800,000 in California and 6 million across the country — who would be forced to pay the entire increase or would risk being priced out of coverage.

“It is important to note that in addition to the removal of the individual mandate penalty, a variety of other factors are causing instability in the individual markets across the country, including the cuts in marketing and outreach in many states, and the prospect of short-term or limited-duration plans that fail to protect consumers or provide meaningful coverage.

“There is still time for policy makers to address these issues before they become a crisis for millions of Americans in 2019. However, just as there is not a single reason for the uncertainty we face, there is not a single solution. There is a range of things policy makers should consider doing now to protect consumers and provide certainty for health insurance companies, including a federally supported reinsurance program, increased investments in marketing and other state-based solutions.

“Lawmakers should seriously consider these steps before we turn back the clock to a time when consumers had Swiss-cheese coverage, meaning they thought they had coverage until they sought to use it, or were turned away for having a pre-existing condition.”

Click here to see the study: https://www.healthaffairs.org/do/10.1377/hblog20180223.551552/full/.

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.

Covered California Thanks Two Departing Board Members and Welcomes New Governor’s Appointees to Board

SACRAMENTO, Calif. — Covered California Board Chair Diana Dooley on Tuesday thanked two departing members of the Board of Directors and welcomed two new members appointed by Gov. Jerry Brown to oversee the agency.

Dr. Sandra Hernandez and Jerry Fleming will serve on the board, taking the places of Marty Morgenstern and Genoveva Islas, who have served since 2015.

Dooley said Morgenstern and Islas will be missed.

“We want to thank both Marty and Veva for the time and effort they have devoted to helping Covered California build an organization that has helped millions of people get affordable health care,” said Dooley. “They both have served the people of California with dedication and a steadfast commitment to putting the needs of consumers first.”

Today, Gov. Brown appointed (https://www.gov.ca.gov/2018/02/13/governor-brown-announces-appointments-13/) Sandra Hernandez and Jerry Fleming to serve on Covered California’s board.

Hernandez and Fleming will join Dooley, Paul Fearer and Art Torres as members of Covered California’s Board of Directors.

Peter V. Lee, executive director of Covered California, said the organization is grateful for the leadership of the departing board members.

“Marty and Veva joined us right after our second open-enrollment period, and their expertise and commitment helped Covered California maintain its momentum and strength,” Lee said. “We want to thank them for everything they have done.”

“We also look forward to welcoming Jerry Fleming and Sandra Hernandez, who bring not only broad and deep expertise in health care, but also tremendous insight into how to ensure Covered California continues to reach and effectively serve the rich diversity of California’s population,” Lee said.

Since 2014, more than 3.4 million people have purchased health insurance through Covered California, and nearly 4 million have enrolled in the state’s Medi-Cal program. Together, the gains have cut the rate of the uninsured in California from 17 percent in 2013 to a historic low of 6.8 percent as of June 2017.

Consumers can still sign up for health care coverage if they experience a life-changing event, such as losing their health insurance, getting married, having a child or moving. For more information on special-enrollment rules, visit: www.CoveredCA.com/individuals-and-families/getting-covered/special-enrollment.

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.

Consumers who qualify for Medi-Cal can enroll year-round.

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.