State’s Health Insurance Exchange Lands $674 Million Grant from Feds

By David Gorn, California Healthline

California's insurance marketplace, Covered California, will open in October, 2013. People will be able to buy insurance, which will take effect January 1, 2014.

California's insurance marketplace, Covered California, will open in October, 2013. People will be able to buy health insurance, which will take effect January 1, 2014.

Peter Lee could hardly contain himself yesterday.

“In 2010, California was the first state in the nation to say we want a state-based exchange. Then, earlier this month, the federal government approved our blueprint for the exchange,” said Lee, the executive director of the state’s health insurance exchange, Covered California.

“And now,” Lee said, “the feds have given us the resources we need to launch Covered California. This is an historic moment.”

Yesterday federal officials awarded $674 million to the California exchange, a grant that funds the set-up of the exchange through the end of 2014.

It was slightly short of the $706 million originally requested for the grant, but Lee was not about to quibble.

“The feds reduced 2014 potential payment for outreach and enrollment by about $30 million,” Lee said. “But we think we have enough resources on hand to do the biggest outreach that I’ve ever seen.”

State HHS Secretary Diana Dooley pointed out that the extensive planning for the exchange was accomplished in a relatively brief time frame, as the exchange board was only formed in April 2011.

“I just have to say how proud I am of the work this group has done in such a short time,” Dooley said. “The work that’s been done is nothing short of extraordinary.”

Yesterday’s federal announcement came a few hours before the board’s monthly meeting — this time held in Los Angeles — where the good financial news continued.

Exchange board member Robert Ross, who also sits on the board of the California Endowment, had another funding announcement.

“We are committing a minimum of $225 million to implement health care reform in our state,” Ross said of the California Endowment.

“There will be four major areas of spending,” Ross said. “Outreach and enrollment, health workforce, chronic disease prevention and cost control and the fourth one is thinking about the population that’s left behind, the undocumented.”

Lee said he hopes the work being done to make health coverage affordable for low- and middle-income Californians will have a ripple effect throughout the health care industry.

“Covered California is not only going to make health care coverage available for millions,” Lee said, “Covered California is going to be integral to creating a health care marketplace that works for everybody.”

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