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Covered California May 2017 Board Meeting

On May 18, 2017, the Covered California board convened its monthly meeting. The board agenda included the Executive Director Report, Covered California policy items, and regulations background materials.

Click here for the Covered California board agenda for May 18, 2017.

Click here for the meeting materials for May 18, 2017.

Click here to watch the board meeting for May 18, 2017.

Executive Director Report

Peter V. Lee, Executive Director of Covered California, delivered the Executive Director Report, which included a federal update, overview of the federal market stabilization regulations, and American Health Care Act (AHCA) updates.

Executive Director Lee introduced “Real Stories of California.” The project looks beyond the analytical data for exchange enrollees to reveal the real-life impact of Covered California coverage. Click here to see the eye-opening project.

Click here (slides 10,11) for Covered California’s briefs informing the national debate on health reform.

On April 18, 2017, the federal Department of Health and Human Services (DHHS) finalized market stabilization regulations. Covered California commented on the final provisions. DHHS will reduce the open enrollment period to 45 days (Nov 1 – Dec 15) in 2018. Director Lee made clear that for 2018, California will maintain its current extended open enrollment period, as outlined in state law. He commented that under existing regulatory authority, state-based marketplaces (SBMs), such as Covered California, may supplement the open enrollment period with a special enrollment period (SEP) to help address operational complications caused by a shorter open enrollment period. Director Lee shared Covered California’s plan to engage policymakers and other stakeholders to consider appropriate adjustments for open enrollment for the 2019 coverage year. He stated that there are good reasons for consumers and for risk mix purposes to have enrollees covered for an entire year. Currently under Covered California’s extended open enrollment period, individuals enrolling in January are not covered for the entire year.

The federal rules altered the special enrollment process by adding pre-enrollment verification. Covered California informed DHHS of existing SEP pre-enrollment verification efforts to leverage electronic verifications. While final regulations do not require SBMs to create pre-enrollment verification, SBMs are encouraged to adopt the federally facilitated marketplace (FFM) process, as outlined in the regulations.

Under the federal regulations, DHHS will allow health plans to have -4/+2 percent variation in actuarial value of metal tier plans, instead of the current -/+2 percent variation in federal rules. In addition, certain Bronze level plans will be permitted to have a variation of -4/+5. SBMs are not required to make this change.

Executive Director Lee reviewed the past, present, and future state of the AHCA. On May 4, 2017, the House of Representatives passed the AHCA (HR 1628) without a Congressional Budget Office (CBO) report. At the Board Meeting, Director Lee informed the Board that on May 24, CBO will publish a score for the House-passed version of the AHCA. The Senate will probably draft their own version of an Affordable Care Act (ACA) repeal bill. If the Senate bill varies from the House bill, a conference committee will iron out the differences between both versions of the bill. The reconciled bill would be reintroduced to both chambers for a final vote. If approved by both chambers, the bill would be sent to the President for approval.

Covered California Policy and Action Items

Fiscal Year (FY) 2017-18 Proposed Budget and Quality Health Plan (QHP) Assessment Fee

Jim Lombard, Chief Financial Officer in the Covered California Financial Management Division, led the discussion of the 2017-18 proposed budget and QHP Assessment Fee. Lombard updated the Board and public on fiscal year 2016-2017:

CC FY 2016-17 Slide

FY 2017-18 Proposal Overview

Click here for the Covered California FY 2017-18 Proposed Budget.

Covered California proposes a budget of $314 million in FY 2017-18. Covered California predicts a stable market with a good risk mix among the 1.4 million actively enrolled consumers. Covered California will sustain the market by investing in marketing, outreach, and customer service. The budget prepares for uncertainty by entering the fiscal year with over $298 million in reserves to react to any changes in health care laws or policies. The budget reflects a commitment to delivering value to consumers and driving for better care and lower costs.

FY 2017-18 Proposed Expenditures

CC FY 2017-18 Proposed Expenditures

FY 2017-18 Budget Conclusion

According to Lombard, the budget is balanced for FY 2017-18. The forecast predicts an assessment rate of 4 percent for the individual market with the option to decrease in the future. At the Covered California Board Meeting on June 15, the Board will be asked to approve assessments for the 2018 plan year. Covered California proposes assessments for individual and dental market health plans at 4 percent of premium, and 5.2 percent of premium for Covered California for Small Business (CCSB). In addition, the Board will take final action to approve the Covered California FY 2017-18 Budget at $314 million.

Regulation Amendments

Drew Kyler, Deputy Director for Outreach and Sales Division, requested Board approval to amend the following regulations:

  • Plan-Based Enroller Program Regulations – Approved
  • Certified Application Counselor Program Regulation – Approved
  • Enrollment Assistance Permanent Regulations Amendment – Approved
  • Medi-Cal Managed Care Enrollment Assistance Program – Approved

The regulations, amendments, and program changes are aimed at streamlining the entity application for alignment with the new program portal efficiencies.

Updated Board Calendar

June 15, 2017
July 20, 2017 (possibly no meeting this month)
August 17, 2017
September, 2017 (no meeting this month)
October 5, 2017
November 16, 2017
December 21, 2017 (possibly no meeting this month)

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