Covered California serves as the health insurance marketplace within the state of California, created in accordance with the federal Patient Protection and Affordable Care Act (ACA).
This platform allows qualified individuals and small businesses to acquire private health insurance plans at rates subsidized by the federal government.
The administration of Covered California falls under the purview of an independent agency within the California government.
Evolution of Covered California
- Inception (September 2010):
- California pioneers the establishment of a health insurance marketplace, signing Assembly Bill 1602 (California Patient Protection and Affordable Care Act) into law.
- Name Adoption (October 2012):
- The program officially adopts the name “Covered California” in line with its mission.
- Initiating Enrollment (October 1, 2013):
- Enrollment begins with a robust start, surpassing federal exchange HealthCare.gov in the first month.
- Over 360,000 applications completed by November 2013.
- First Open Enrollment Period (April 2014):
- Successful closure with 1.4 million enrolled in Covered California.
- Additionally, 1.1 million signed up for Medi-Cal through the portal.
- Second Open Enrollment Period (November 2014):
- Goal set to enroll an additional 500,000 people.
- Collaborative efforts with professional organizations to boost enrollments.
- Government Assurance (2014):
- Government and immigrant rights groups assure applicants that personal information shared with Covered California won’t be disclosed to U.S. Immigration and Customs Enforcement.
- Special Enrollment Period (February 2015 – April 2015):
- Announced to assist 600,000 Californians in reducing tax penalties for being uninsured in 2014.
- End of Second Regular Open Enrollment (February 2015):
- 474,000 potential new enrollees recorded.
Coverage Options
There are four available coverage levels, each influencing the consumer’s financial responsibility:
- Bronze Level:
- Health plan covers 60% of health-care costs on average.
- Consumer contributes 40%.
- Silver Level:
- Health plan covers 70% of health-care costs on average.
- Consumer contributes 30%.
- Gold Level:
- Health plan covers 80% of health-care costs on average.
- Consumer contributes 20%.
- Platinum Level:
- Health plan covers 90% of health-care costs on average.
- Consumer contributes 10%.
Minimum Coverage Plan (for consumers under 30):
- Covers three visits with no out-of-pocket costs and free preventative benefits.
- Full-price services until the consumer spends $8,150, after which the health plan covers all costs.
Essential Health Benefits
As part of the Affordable Care Act, Covered California mandates insurance companies to provide essential health benefits.
Some of these services include:
- Ambulatory services
- Emergency/urgent care
- Hospital care services
- Maternity and newborn care
- Mental health and substance abuse services
- Prescription medication
- Rehabilitation services
- Laboratory services
- Preventative and wellness care
- Pediatric services
Dental and Vision Care
Dental Care:
- Not mandatory in health plans.
- All Covered California health insurance plans include pediatric dental care.
- Adults can opt for supplemental dental care services within their plan.[19]
Vision Care:
- Not obligatory in health plans.
- Covered California provides vision care for children but not for adults.
- Collaboration with specific companies enables direct offering of vision care to adults.[19]
Governance, Staff, and Budget
Board Composition:
- Governed by a board of five members.
- Members include the Secretary of California Health and Human Services Agency, two Governor-appointed members, one Senate Committee on Rules-appointed member, and one Speaker of the Assembly-appointed member.
- All board members serve four-year terms.[20]
Leadership:
- Current executive director: Peter V. Lee.
- Board includes CA HHS Secretary Dr. Mark Ghaly (chair), Paul Fearer, Jerry Fleming, Dr. Sandra Hernandez, and Art Torres.[21]
Staff and Funding:
- 1,230 authorized positions in fiscal year 2014–15.
- No state tax funding; received $1.1 billion in federal funds by January 2014.
- Required to be self-supporting by January 2015.
- Estimated personnel expenditures in fiscal year 2014-15: $108 million.
- Projected multimillion-dollar deficit in fiscal year 2015.[22][23]
Budget:
- Fiscal year 2015-2016 last year using federal establishment funds.
- Proposed 2015 budget: $332.9 million, adopted budget approximately $335 million.
- Proposed 2016 budget: $308 million, adopted budget $320.9 million.
- Proposed 2017–2018 budget: $313.9 million.[25][26][27]
Active Purchasing and Insurance Providers
Active Purchasing:
- Uniquely utilizes “active purchasing” to negotiate lower premiums, standardize benefit designs, and improve quality and equity.
- Simplifies benefits for consumers, encourages transparent comparisons, and promotes price competition to lower premiums.[28]
Insurance Providers (As of 2017):
- Anthem Blue Cross of California
- Blue Shield of California
- Chinese Community Health Plan
- Health Net
- Kaiser Foundation Health Plan
- L.A. Care Health Plan
- Molina Healthcare
- Oscar Health
- Sharp Health Plan
- Valley Health Plan (owned by Santa Clara County)
- Western Health Advantage (partnership of Dignity Health Sacramento, UC Davis Health System, and NorthBay Healthcare)
Also read: Advance Financial Health Scam
Impact Analysis
Uninsured Rate:
In 2015, California’s uninsured rate stood at 8.1%, marking a notable 9.1% reduction post the Affordable Care Act implementation.
Additionally, out of the 5.4 million Californians gaining coverage, 1.4 million secured it through Covered California, and 4.1 million through Medi-Cal expansion.
Despite these improvements, the exchange’s enrollee numbers have not surged significantly beyond the 1.4 million from the inaugural open enrollment period in 2014.
Notably, dynamic shifts occur during subsequent enrollments as some opt for exchange plans, while others become eligible for Medi-Cal or secure employer-based coverage.
A 2014 analysis anticipates continuous enrollment fluctuations, estimating 1.1 to 1.3 million people with subsidies enrolled in Covered California at any given time due to the churn rate.[30][31]
Disparities in Access:
Covered California collaborates with 11 insurance companies (as of 2017), yet the count varies across counties, ranging from two to seven.
Furthermore, a 2015 study by the California Healthcare Foundation revealed that the number of hospitals in an insurance network does not significantly impact the quality of care.
In addition, research in Health Affairs suggests that while marketplace hospital networks may be narrower than commercial counterparts, geographic access remains similar, and care quality might even be superior.
However, limited healthcare provider options could compromise insurance companies’ negotiating power, potentially resulting in higher premiums