January Exchange Board Meeting: Covered California Announces Federal Grant Award, Considers Plan Contract Requirements and Bridge Plans to Include Medi-Cal Managed Care Plans

January 22, 2013

The January Exchange Board meeting opened with the Executive Director’s report, with Peter Lee summarizing Covered California’s major planned milestones for 2013. These goals include launching a Covered California consumer website in January, selecting an administrative vendor for the SHOP Exchange in February, announcing outreach grantees in April, beginning assister selection in May, selecting qualified health plans in June, launching the service center in July, and beginning enrollment in October.

Mr. Lee also announced that Covered California was awarded $674 million in a federal Level 2.0 Establishment Grant. This grant will provide all necessary funding for Covered California through the end of 2014, at which point the Exchange will be financially self-sustaining through fees collected from participating health plans. Covered California additionally received federal approval in January for its Exchange blueprint application.

Dr. Robert Ross, President & CEO of The California Endowment and Covered California board member, announced The California Endowment’s intent to grant a minimum of $225 million over the next four years to support effective implementation of the Affordable Care Act in California. These funds will initiate and support community outreach and enrollment activities, expand the primary care workforce, invest in delivery system reform to control health care costs, and support public and private approaches to providing better care for California’s undocumented population.

Oscar Hidalgo provided an update about the development of a consumer website for Covered California (coveredCA.com). A preliminary version is shown below. The website will contain a variety of information Covered California, the Affordable Care Act, health insurance plans, and support services. The website will also contain informational videos and a cost calculator. All information will be available in multiple languages.



Thien Lam concluded the Executive Director’s report by providing an update with the proposed eligibility and enrollment timeline for 2013.


Andrea Rosen, David Maxwell Jolly, and Ken Wood presented updates regarding proposals for Partner Plan model contracts. The staff aims to have contract negotiations completed by May 15, 2013. They propose that contracts include quality improvement and delivery system reforms, effective consumer communication strategies, joint marketing with issuers aimed to increase “rollover” of existing customers into Covered California plans, and a performance-based fee structure for plans. Board members discussed several requirements, including using data analytics and health assessments, assigning enrollees to primary care providers or patient-centered medical homes within 45 days of enrollment, identifying enrollees with chronic conditions and arrange for them to receive needed services in a timely fashion, and requiring plans to demonstrate that a defined percentage of enrollees receive preventive services within 120 days of enrollment.

The staff also proposed plans to establish fees of 3% for Partner Plans and supplemental dental and vision plans in the individual market, and Covered California will collect the fees on a per member per month basis. Non-Covered California plans will be assessed a fee of 50% of the rate for Covered California plans. The staff proposed a 4% fee for plans that will be sold in the SHOP Exchange, and an additional component to cover the cost of agent commissions. Non-Covered California SHOP plans would also pay an assessment at 50% Partner Plans under the proposal.

The staff additionally proposed a discount of up to 10% of the plan fee (which would lower the fee to 2.7% of the premium) for lives that issuers convert from their existing insurance coverage. Conversely, plans would have to pay an additional 10% of the fee (or remit a fee of 3.3% of the premium) if service standards are not met, yet good performance on certain metrics would offset bad performance on others.

David Panush presented staff recommendations for promoting continuity of care and affordability through Medi-Cal managed care plans. The first recommendation is to allow beneficiaries of Medi-Cal managed care plans to have the choice of remaining in their plans in the event that their incomes rise above 138% of federal poverty. The coverage would extend to 200% of federal poverty for most of this population, with an extension to 250% of poverty for parents of children with Medi-Cal/CHIP coverage (formerly Healthy Families). Covered California would negotiate contracts with Medi-Cal plans to provide this option. The second recommendation was to extend the option to enroll in Medi-Cal managed care plans to the full population between 139% and 200% of poverty that is eligible for Covered California. This recommendation would require both federal regulatory approval and state legislation. The third recommendation was to streamline the Qualified Health Plan certification process for Medi-Cal managed care plans to maximize their participation.

The Board ultimately decided not to vote on any action regarding the Bridge Plan, delaying the decision until the February meeting to allow the Covered California staff to do more research on the potential consequences of the different options.

For the full January meeting materials: http://www.healthexchange.ca.gov/BoardMeetings/Pages/MeetingMaterialsforJanuary17_2013.aspx