It's Official: California Submits Blueprint for New Health Benefit Exchange


Posted on 15 November 2012

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By Linda Leu

With last week's election result ensuring the continued implementation of the historic Affordable Care Act, the board of the newly-named "Covered California" Health Benefit Exchange met Wednesday to finalize its start-up operations and roll-out over the next two years.

Covered California will be the new marketplace under the Affordable Care Act to help California families and small businesses shop for health insurance and get subsidies to make such coverage affordable. The expansion of coverage through Medi-Cal and Covered California to millions of Californians starts January 1, 2014, with an "open enrollment" period to sign people up in the third-quarter of 2013.

The Board approved a grant application Wednesday that would request funding from the federal government to take the remaining steps to establish the Exchange. The previous 2 federal grants were for planning the Exchange, but this new establishment grant will fund the operations of Covered California for 2013 and through its first year of full operation in 2014. After this, Covered California will be self-sustaining through assessments on participating health plans of around 2-4%.

The application includes the basic blueprint of the Exchange's operations, including everything from information technology, to a service center, to marketing and outreach efforts. Covered California will be requesting around $300 million per year through the end of 2014, with the total request at $706 million. Executive Director Peter Lee explained that this funding is the right amount to address the magnitude and diversity of California, and to incrementally invest in the building of a sustainable organization, not just operational funds for the three specific years. The staff plans to work toward creating a 3 month operating reserve by the end of 2014.

The Covered California Board also heard updates on a number of implementation issues:

  • CalHEERS Update - California Health Eligibility, Enrollment and Retention System staff reported that they have completed 83% of the 720 requirements they have laid out toward building the IT system. They will be releasing draft system requirements Friday, and stakeholders will be able to comment on these until November 30.
  • Service Center Update - Staff have begun searching for the physical spaces that will house service center sites, one in the Sacramento area, and one in Southern or Central California. The location of a third site is yet to be determined (counties have been invited to bid for this contract to be awarded by January 31). Staff has also begun to recruit up to 850 positions for customer service.
  • Evaluation Plan - Staff has developed a logic model and are looking at data sources to work toward a comprehensive evaluation plan to ensure that Covered California operates as an evidence-based organization.
  • Naming and Branding - Covered California has solidified a name, a logo, and a color scheme but staff are still focus-group testing a tagline. This will be especially important when translation is necessary to reach limited English proficient customers.
  • Advisory Groups - Staff has extended deadline for nominations to the three stakeholder groups that will convene in January.
  • QHPs - Additionally the Board approved a notice of proposed rule making that will be released today, in conjunction with the final solicitation for Qualified Health Plans (the plans that will be sold in the Exchange) that was released Tuesday.

Finally, the Board also approved enhanced funding for contract organizations to provide Consumer Assistance and Ombudsman services. There will be no new solicitations, but these funds will bolster capacity for organizations that already provide these services in partnership with the state Department of Managed Health Care and the Department of Insurance.


Linda Leu is a health care policy analyst for Health Access California, a statewide health care consumer advocacy coalition of over 200 groups.