It’s not easy to figure out how to monitor the progress of Covered California, the country’s largest state-run health insurance exchange.
Is it the total number of people who have signed up for an insurance plan on the exchange during open enrollment? The rate at which people renew? The number of new sign-ups in a given year? The number of Latino sign-ups? The number of “covered lives”? The number of Californians who have had coverage through the exchange at any point? Or, simply, the overall rate of uninsured adults across the state?
In recent months, Covered California has cited each of these measures to tout its success. And though outside analysts have raised some notes of caution, press coverage has largely followed the lead set by the exchange. The result is coverage that has too often been reactive, short on enterprise, and with missed opportunities to ask some necessary questions. Covered California may ultimately have a success story to tell—but it will need to face some sharper skepticism before we can be sure.
Let’s review some of the recent discussion. Last summer, a few months before Covered California officially opened for the second year of enrollment, executive director Peter Lee sat down for a lengthy interview with Maria Ortiz-Briones of Vida en el Valle, also published at the website Reporting on Health.* The exchange was coming off a first year in which overall enrollment looked strong, though with a few hiccups. Lee talked about the challenge of signing up Latinos, an important target. He outlined a goal of 1.7 million Californians enrolled on the exchange in 2015, which would mark a gain of about 500,000 over the first year. And, he added, “in many ways we are an example for the rest of the nation”–an image the exchange has tried hard to project.
Press releases from Covered California over the ensuing months emphasized a sense of momentum toward a banner year, and coverage often followed suit. The San Jose Mercury News told readers in December that “for the second year in a row, California is posting robust initial numbers of legal residents signing up for health insurance.” In mid-January, the Los Angeles Times reported that “California’s health exchange said it has seen a strong turnout among Latinos for Obamacare coverage after nearly two months of open enrollment.” Even when coverage noted the “uphill climb” to reach the enrollment target, as in a late January LA Times article, much of the focus was on sunnier metrics, like a reported renewal rate above 90 percent.
Then, in February, as the enrollment deadline approached, the upbeat storyline hit a stumbling block: Total sign-ups were coming in several hundred thousand people below the goal. Reporting on the news, Chris Rauber of the San Francisco Business Times warned that “the current less-than-expected enrollment total will result in a $21 million reduction in expected operational funding, Covered California officials confirmed. That gap could grow to $75 million next year if enrollment were to stay in the 1.4 million range.” The following month, the federal Department of Health and Human Services released numbers confirming Covered California’s 2015 enrollment stood at 1.4 million people.
It’s hard to find that number in the exchange’s press release archive, though. Instead, the exchange emphasized that it had just about met the related target of 500,000 new sign-ups. The overall shortfall was because the base enrollment had dropped throughout 2014, as customers failed to make premium payments, became eligible for Medicaid, or found other private insurance. One of those January stories had actually explained this in passing. Still, the results raised some questions: Why weren’t these trends anticipated? What might those budget adjustments mean for state residents enrolled in the exchange? How important is all this for the broader goal of expanding access to care?
But, while the enrollment figures appeared in coverage, for the most part the state’s reporters were not aggressive in probing these questions. In early March, for example, an article in the Los Angeles Times led by noting that the exchange had fallen short of its goal—but then focused on the “strong performance of insurance agents” in getting people enrolled and “progress with some key groups, such as Latinos and young people.” (Many of the details had appeared in a press release a few days earlier.)
In April, more news came out that challenged the “example for the nation” theme. An analysis from the consulting firm Avalere Health concluded that about one-third of the people who signed up for a plan via Covered California in 2014 didn’t renew, giving the state the fourth-lowest re-enrollment rate in the country. In addition, it pointed out, overall enrollment on California’s exchange grew by just 1 percent—worse than just two other states, Vermont and Washington, which saw decreases. That didn’t prompt a flurry of coverage. My search for media pickup in selected state outlets immediately following the Avalere study unearthed a commentary from the conservative editorial page of the Orange County Register; Rauber covered it in the San Francisco Business Courier, too.** And the final 2015 enrollment deadline at the end of April—the exchange had extended enrollment for people who had been unaware they could face a tax penalty for going without insurance—didn’t spark a wave of news coverage, either.
Then, on May 13, Covered California released its proposed budget for 2015-2016, along with a press release touting the exchange’s “solid foundation” and “strong enrollment.” Deutsche Bank analysts had a less sunny take on the budget, writing that the exchange had “lowered its baseline FY 14-15 and FY 15-16 projections quite materially after lackluster enrollment growth in the 2015 open enrollment” and is now projecting an “effectuated enrollment [meaning those who paid their premiums] of 1.3 million… as of June 2015 which is down 24% from last year’s projection.”
This time, the Los Angeles Times moved beyond the press release. Wrote reporter Chad Terhune:
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, 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.
Terhune’s article pointed to Avalere’s April analysis and explained that after the federal start-up money is used up, the exchange will rely on monthly fees tacked onto every individual policy to fund its operations. That’s one of the reasons these enrollment numbers matter: Those fees pay for service and outreach, and, as Terhune’s story notes, there is a debate underway about whether Covered California will generate the money it needs to offer a high-quality operation to customers while keeping fees in check.
This isn’t only a concern in California. The Washington Post reported in May that about half of the 17 state-run exchanges are struggling financially, “presenting state officials with an unexpected and serious challenge.” (The Post story didn’t mention California.) Avalere CEO Caroline Pearson told me that the Golden State’s sign-up shortfall parallels the national trend. “Enrollment overall is lower than expected,” she said. “Achieving target enrollment has proved harder than policymakers anticipated. Does it mean it will be smaller forever, or will it just take longer to get there?”
Covered California rejects the Avalere analysis, which is based off the number of people who had selected a plan back in spring 2014—nearly 1.4 million. (These data are uniformly available for all 50 states, which makes the analysis possible.) By instead using as a baseline the roughly 1 million people who finished 2014 as customers, the exchange can report stronger growth and higher renewal rates this year. Even so, the exchange’s claimed 92% renewal rate comes from counting “eligible consumers” who “began the renewal process” in 2015, not those who finish it. And if the California exchange fares poorly compared to other states in Avalere’s analysis because it saw higher levels of attrition in 2014, it’s worth understanding in detail why that is. (The state’s decision to expand Medicaid, noted above, is one factor, but likely not the only one.)
Another thing Covered California now rejects: the notion that it fell short of its enrollment target this year. Though the 1.7 million figure was cited publicly as a goal, an exchange spokesman told me this week that “we finished open enrollment within our range of projections,” because the exchange surpassed “the projected low forecast of 1.3 million.” Meanwhile, Peter Lee, the director, this week announced a new focus on “covered lives”—people who have selected a plan on the exchange, paid their premium, and have insurance. As of March, this number stood at 1.3 million.
It can be exhausting to sort out all the different metrics, and the state’s healthcare reporters have had plenty of other stories to chase. But going forward, the exchange warrants closer scrutiny than, for the most part, it got this year. And while reporters should definitely be attentive to outside evaluations both critical and positive—like a recent Health Affairs study that found exchange plans were of comparable or even better quality than plans bought on the private market—there is a role for journalists to play, too, in getting out there and talking to people about their insurance arrangements. Lee says Covered California plans to do research on whether affordability concerns remain a barrier to enrollment. I’ll be interested to see the results, and I hope the state’s media outlets do some research and reporting of their own on that point.
One last note: In a recent press release, Covered California noted that in the first year the exchange offered coverage, “the number of uninsured Californians dropped from 22 percent to 11 percent, according to the Commonwealth Fund.” (Commonwealth is a funder of CJR.) That’s true, and it’s a finding that was fairly widely covered when it was first released last summer. Not mentioned in the press release is the fact that a more recent Commonwealth analysis—one that’s more directly comparable to the earlier survey—put the uninsured rate for the state’s working-age adults at 17 percent. Compared to the initial baseline, that’s still good news, just not as good—and it’s a reminder of why it’s important to go beyond the press release every time.
* Correction: This sentence has been revised to correct the affiliation of Maria Ortiz-Briones and note that the interview first appeared at Vida en el Valle.
** Correction: This sentence has been revised to note coverage by the San Francisco Business Courier.
TOP IMAGE: Photo: Rich Pedroncelli/AP