California's health insurance exchange was the Rookie of the Year in 2013 among the states that created exchanges under the Patient Protection and Affordable Care Act. More than 1.1 million Californians signed up with a health plan through Covered California in the first open enrollment period. The exchange hit one out of the park, yet it's the rookie mistakes that bother its leader.

The executive director with California's health insurance exchange promised that problems encountered by the 1.1 million residents who signed up for coverage last year would be fixed when re-enrollment opened Nov. 15.

Peter Lee unveiled in Sacramento in October several initiatives and planned improvements in response to criticism from last year. Lee assured reporters and consumer advocates that the California health exchange has increased website capacity, added call center staff and installed a dedicated line for insurance agents to assist with applications.

"This is our very first experience with renewal, and we will learn things during this process just as we learned a great deal about open enrollment during 2013-2014," Lee said. "We do believe many significant improvements have been made that will assist our consumers during both renewal and open enrollment this year."

Good news

The upgrades affect both consumers and insurance professionals, and include:

Call centers: Covered California will more than double the number of service center reps—state employed and contractors—to reduce wait times and assist consumers to enroll. More than 1,300 representatives will help consumers over the phone, by chat or by processing their paper applications or documents. By comparison, Covered California began open enrollment last year with 381 service center representatives and ended with 709. This year Covered California will have 254 service center representatives able to serve consumers in languages other than English, compared with 55 during open enrollment in 2013. Representatives fluent in Spanish and Chinese and other languages have been added.
Payments online: The 10 health plans in the exchange will accept an online premium payment as soon as an enrollee selects a plan. Consumers can have greater confidence their coverage is in place knowing their premium is made and processed.
Website: Covered California spent $22.6 million to upgrade the enrollment portal. This was done to ensure greater user capacity of the website and faster page loads. Last year, high demand overwhelmed the website, causing delays for people trying to complete applications. The explanations on the website are clearer now, as are notices sent to enrollees.
Self-service: The interactive voice response system is better, able to handle more consumer calls while reducing wait times. The system will let callers know the wait times when they're on hold waiting to speak with a service representative.
Bigger role for agents: Certified enrollment counselors and certified insurance agents are some of the agency's strongest connections to consumers. Covered California will give certified counselors and agents more ways to educate enrollees, including webinars, training from subject-matter experts, a bimonthly newsletter to highlight best practices and modifications to the enrollment process, and a glossary of terminology.

Also, the exchange will add dedicated call lines so its counselor and agent partners are involved with consumers during the application process.

"Last year, we succeeded in signing up millions of Californians in health coverage through Covered California and Medi-Cal," Lee said. "We learned a great deal in the process, and in this second open enrollment we are building on those lessons using effective and concrete changes."

The goal of the upgrades is to make the consumer experience "more seamless," according to Covered California. It commissioned a study of the exchange's first open enrollment period, and fashioned the changes based on the findings of "Covered California Open Enrollment 2013-14: Lessons Learned."

Second-year goals for new enrollees is 500,000, down from the first-year enrollment figures released as part of Covered California's media blitz to kick off the second enrollment.

81 percent of Californians who selected a plan during the initial open enrollment paid their first month's premium and were covered during the period.
1.12 million individuals have bought coverage and will be part of the renewal process.
Covered California expects about 1.3 million Californians to participate in the renewal process through the end of the year. Special enrollment and newer enrollees continuing their coverage account for the increased participation.

The first re-enrollment period (and the open enrollment, too) are compressed this time. Instead of six months, the exchange and Californians in the market for health coverage must decide on a plan and lock in coverage in about 90 days. The exchange plans to spend nearly $100 million to get out the message about the benefits of enrollment and having health insurance.

The "I'm In" TV campaign debuted in September, and features a diversity of Californians talking about how health coverage has improved their lives and their families. Covered California will spend nearly $100 million to add 500,000 new enrollees and further reduce the uninsured ranks of Californians. A big push will be made using grant money for community-based groups.

The "I'm In" campaign includes $94 million for community outreach and point-of-contact marketing to the underserved populations that traditional media doesn't reach.

Individuals who receive health coverage under the Medi-Cal program for low-income individuals and families are not affected by the Nov. 15 open enrollment. Medi-Cal will contact them directly if they need to go to the Covered California website to apply, according to a news release.

Coverage California made upgrades ahead of the re-enrollment and open enrollment for 2015, all designed to reach second-year enrollment goals of having 1.7 Californians insured through the exchange. The 10 insurers that participated in the exchange's first round of open enrollment will return. The exchange plan premiums for 2015 will be a weighted average of 4.2 percent higher—lower than estimates of 5 percent to 7 percent increases analysts made in the spring.

The bad news

But it's not all good news. More than 10,000 people missed a Sept. 30 deadline to file proof of legal citizenship or risk being dropped by their health plan. Notices asking for proof of legal residency were mailed on Sept. 1 and 10,474 people did not respond with the required documents.

Roy Kennedy, a Covered California spokesperson, said that those who receive the termination notice could still respond "immediately" by providing appropriate documents so they "don't face a gap in coverage."

Critics asserted that Covered California didn't do enough to reach minorities and non-English speakers in the first enrollment period. Latinos represent a large portion of the uninsured population of Californians, yet they were underrepresented in the first open enrolment period, according to a study by the Public Policy Institute of California. A legislative bill, SB 972, to make the skills and makeup of the Health Benefit Exchange Board more diverse passed the state Legislature and Gov. Jerry Brown signed it into law over the summer.

The exchange board, concerned about the lack of participation by Latinos and other minority groups in the state, reviewed the success of the California State University in signing up its uninsured students. The state university system started open enrollment last year with a 25 percent population of uninsured students. The figure dropped to 10 percent by the close of enrollment.

"As much progress as we've made in three and a half years, we are still really at the very beginning," said board chair Diana Dooley. "We are in transformational change that is going to take a long time."

Covered California has been around since 2010, when then-Gov. Arnold Schwarzenegger threw support to PPACA by establishing the first state-run exchange. The actor-turned-politician signed the legislation to establish the California Health Benefit Exchange, an independent, five-member oversight board that outlined how the exchange would operate in time for the federal deadline of January 2014.

"For national reform to succeed, it will up to the states to make it work, and California is moving forward on reforms that will provide affordable and quality health care insurance," Schwarzenegger said in his signing statement.

Officials are optimistic, yet cautious, about the state's enrollment period.

"We're extremely excited about the changes we have put in place, and we look forward to building on the enthusiasm around open enrollment this year as we did last year," Lee said. "At the same time, we know we have more work to do. We want Covered California to deliver best-in-class customer service, and we know we're not there yet."

New controversy arose this month over no-bid contracts given to firms with ties to Executive Director Lee. The Associated Press reported the exchange awarded $184 million in no-bid contracts and that a former colleague of Lee's runs one of the companies that received $4.7 million for publicity and media.

Covered California was granted the authority to award no-bid contracts to ensure it could meet deadlines for getting the exchange operational in time for the PPACA's first open enrollment period. Typically, state contracts must be put out to competitive bid.

The group Consumer Watchdog has called on the state Attorney General Kamala Harris to launch an investigation into the matter. Jamie Court, the group's president, said, "For $4.2 million to flow to a former associate without any oversight is the antithesis of open government and good government."

Instant Insights /

Exchange Spotlight: California

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