News Release

Date Posted

Covered California Awarded Federal Grant to Establish Health Insurance Marketplace

Establishment grant supports continued development of the online marketplace that will provide insurance to millions starting in 2014.

SACRAMENTO, Calif. – Covered California’s Executive Director Peter V. Lee announced today that California has been awarded a federal grant totaling $674 millionover two years to continue the development and establishment of an online health insurance marketplace designed to bring high-quality, affordable health insurance options to millions of Californians beginning in 2014.

“The funding announced today is based on a detailed business model which had the input of hundreds of stakeholders and experts in California,” said Lee. “This is a critical investment in the health and well-being of millions of Californians to finally have access to affordable, quality healthcare. We couldn’t be more pleased and honored to take on this challenge.”

Covered California’s Board Chair Diana Dooley recognized the tremendous progress California has already made while recognizing the challenges ahead.“I am extremely proud of the work already done in California to establish this important marketplace,” she said. “This investment will pay big dividends as Covered California makes health insurance available for so many uninsured Californians."

In announcing the funding, Lee noted, “The funding is substantial; but given the scale of what we’re doing – millions of Californians and small businesses currently going without insurance or paying too much will benefit – we have a big job to do.”

The grant is part of the federal Patient Protection and Affordable Care Act of 2010.

Activities funded by the grant include:
An online web portal where consumers can make apples-to-apples comparisons of quality private plans and apply federal tax credits towards the cost;
  • Review and certification of quality health plans available for purchase through the online marketplace;
  • A multi-cultural, multi-language marketing and education campaign to reach millions of eligible Californians and small businesses;
  • A network of community-based “assisters” to help guide individuals through the process of enrolling;
  • A multi-language call center to help enrollees with questions about enrollment; and
  • An administration office to support efficiencies in the organization, which is expected to employ nearly 700 people by the end of 2013.

Covered California’s business model calls for the state to operate the marketplace beginning in 2015 without either any federal funding or any funds from the State of California, relying only on fees assessed on plans sold through the marketplace.

About Covered California

California is the first state to create a health benefit exchange following the passage of federal health care reform. Covered California is charged with creating a new insurance marketplace that allows individuals and small businesses to purchase competitively priced health plans using federal tax subsidies and credits. Coverage starts in 2014.Covered California is overseen by a five-member board appointed by the Governor and Legislature; the California Health and Human Services Secretary serves as an ex officio voting member and is its current Chair.
For more information on Covered California, please visit