You Mean it's NOT free?
(Los Angeles Times) - After using most of $1 billion in federal start-up money, California's Obamacare exchange is preparing to go on a diet.
That financial reality is reflected in Covered California's proposed budget, to be released Wednesday, as well as a reduced forecast calling for 2016 enrollment of fewer than 1.5 million people.
The recalibration comes after tepid enrollment growth for California during the second year of the Affordable Care Act. The state ended open enrollment in February with 1.4 million people signed up, far short of its goal of 1.7 million.
Covered California can't draw on the state general funds, and its primary source of revenue is a $13.95 monthly fee tacked onto every individual policy sold.
"This budget marks a turning point for Covered California of moving from a start-up with federal support to demonstrating we can operate under our own steam for years to come," said Peter Lee, Covered California's executive director.
The budget details include proposals to:
- Spend $58 million less compared with the current fiscal year, a 15% reduction.
- Devote the largest portion, $121.5 million, to outreach, sales and marketing. That's down 33% from the current year.
- Maintain the monthly $13.95 fee for each individual policyholder, which would raise $233.2 million in revenue.
- The state also would draw on $100 million in federal money in reserves — the last of the start-up grant. No further federal funding is expected.
"Holding fees flat like they did is an important safeguard for the affordability of Covered California coverage," said Nicole Evans, a spokeswoman for the California Assn. of Health Plans.
"As the myriad of interest groups pressure the board to fund their projects, they need to stand firm in protecting premium prices and holding down the budget," she said.
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