Budget Focus at Covered California Board Meeting

This post was written by Kate Burch

The Covered California board meeting on May 12 addressed several controversial issues. You can find a recording of the board meeting, links to the presentations, reports, proposed regulations, attachments, and other materials here.

Market Analysis

Covered California contracted with PwC for an in-depth analysis of the direction of the health insurance market over the next 6 years. The presentation to the board included information about enrollment projections with different scenarios (major changes to the economy, change in subsidies, change in minimum wage, etc.). Covered California used the projections and scenarios from this research to make their enrollment and income projections for the coming years. These projections are an important part of how Covered California budgets for future years.

Budget Proposal

Covered California staff presented a proposed budget to the Board. The coming fiscal year will be the first year that Covered California is operating without any federal funding, relying solely on their reserves and the fees assessed from participating health plans for their funding. The proposed 2016-2017 budget is $308 million, which is $25 million lower than the 2015-2016 budget. These are some of the changes expected in the 2016-2017 budget.

  • Previously, health plans were paying a flat per member per month fee. Beginning in 2017, plans will pay 4% of the premium for the individual market.
  • 2016-2017 will be the last year that Covered CA has a call center in Contra Costa County; in future years they will rely on two call centers rather than three.
  • Covered California proposes ending their relationship with the Health Consumer Alliance, and instead instituting an ombudsman program to help resolve consumer issues independent of the service center.
  • Funding for the Navigator Program was cut to $5 million, down from both the $13 million approved in the 2015-2016 budget and the $10 million actually awarded to Navigator Grantees.

Consumer advocates provided extensive comments. The two main areas of interest were the relationship with Health Consumer Alliance and the reduced Navigator Program. Advocates emphasized the importance of an outside entity providing consumer assistance in certain complicated cases, which will no longer happen if Covered California ends their relationship with Health Consumer Alliance. Establishing an ombudsman program within Covered California will be insufficient to replace the work of the Health Consumer Alliance.

Consumer advocates also spoke strongly in support of the Navigator Program. Certified Enrollment Counselors called in to the board meeting to express the importance of the individual assistance they are able to provide. Advocates spoke in favor of funding the Navigator Program at the same level as last year, if not higher, and strongly opposed cutting the funding in half.

The budget was presented for discussion; Covered California staff will present a final version of the budget for board approval in June.

Navigator Program

Covered California staff provided an update on the success of the Navigator Program this year. Navigators provide outreach, education, enrollment assistance, renewal assistance, and post-enrollment support, and specialize in reaching and supporting some of the hardest to reach populations.

During Open Enrollment 3, Certified Enrollment Counselors in the Navigator Program enrolled, renewed, and retained 77,154 people.

Covered California staff recommends inviting 46 of the current 68 Navigator Grantees to renew their Navigator contract for 2016-2017. The 46 organizations that Covered California wants to continue as Navigators had an average cost of $166 per enrollment/renewal, and the organizations that will not be invited to renew their contracts had an average cost of $575 per person assisted.

Covered California recommends a target of $200 per person assisted. With a recommended funding level of $5 million, Covered California anticipates the Navigator Program helping 25,000 people in 2016-2017, which is 50,000 fewer people than in 2015-2016.

Special Enrollment

The Covered California Board approved the Individual Eligibility and Enrollment Regulations for re-adoption that were presented at the April board meeting. Within those regulations, the Board approved making changes to the Special Enrollment policy.

For the remainder of 2016, Covered California will require that a statistically significant random sample of people enrolling during the Special Enrollment Period provide documentation to prove the qualifying life event (QLE) that they attested to. If Covered California can’t verify the QLE, the individual will be ineligible to enroll during the Special Enrollment Period. Covered California will evaluate the results of their random sample to get a clearer picture of what is actually happening with the population that enrolls outside of Open Enrollment.

The changes adopted do not reflect the new federal interim final rule issued on May 6 that imposes new requirements on people who are eligible because of a permanent move. We can expect to see further updates to the eligibility and enrollment regulations in future months to align with the new federal regulation.

Language on the application will more strongly explain consumers’ financial liability for incorrectly attesting to a qualifying life event, and will require that consumers acknowledge that they might be asked to verify their qualifying life event.