Q&A: How California’s Insurance Enrollments Beat Healthcare.gov
by Charles Ornstein,ProPublica.
There’s good news flowing from the Golden State — and Peter Lee has a lot to do with it.
“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 Healthcare.gov 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 who 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 cancelations 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 website. 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 website 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 who 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 enrollment 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.
Photo: Amy The Nurse via Flickr