BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 972
AUTHOR: Torres
INTRODUCED: February 10, 2014
HEARING DATE: April 24, 2014
CONSULTANT: Boughton
SUBJECT : California Health Benefit Exchange: board: membership.
SUMMARY : Expands the Covered California executive board from
five to seven with the two additional members appointed by the
Governor. Adds to the areas of required demonstrated and
acknowledged expertise of board members: marketing of health
insurance products, information technology system management,
management information systems, and consumer service delivery
research and best practices.
Existing law:
1.Establishes in state government the California Health Benefit
Exchange, an independent public entity not affiliated with an
agency or department, known as Covered California
2.Requires Covered California to be governed by an executive
board, consisting of five members who are residents of
California. Of the members of the board, two appointed by the
Governor, one appointed by the Senate Committee on Rules, and
one appointed by the Speaker of the Assembly. The Secretary
of the California Health and Human Services or his or her
designee serves as a voting, ex officio member.
3.Requires Covered California board members, other than the ex
officio member, to be appointed for a term of four years,
except for the initial appointments of the Speaker and Rules
Committee which are two and five years, respectively.
Requires appointments made after January 2, 2011 by the
Governor to be subject to confirmation by the Senate.
4.Requires each person appointed to the Covered California board
to have demonstrated and acknowledged expertise in at least
two of the following areas:
a. Individual health care coverage;
b. Small employer health care coverage;
c. Health benefits plan administration;
Continued---
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d. Health care finance;
e. Administering a public or private health care
deliver system; and,
f. Purchasing health plan coverage.
5.Requires appointing authorities to consider the expertise of
other members of the Covered California board and attempt to
make appointments so that the board's composition reflects a
diversity of expertise.
6.Requires appointing authorities to take into consideration the
cultural, ethnic, and geographical diversity of the state so
that the board's composition reflects the communities of
California.
7.Prohibits Covered California board members or staff from being
employed by, a consultant to, a member of the board of
directors of, affiliated with, or otherwise a representative
of, a carrier or other insurer, an agent or broker, a health
care provider, or a health care facility or health clinic
while serving on the board or on the staff of Covered
California. Prohibits a member of the board or of the staff
of Covered California from being a member, a board member, or
an employee of a trade association of carriers, health
facilities, health clinics, or health care providers while
serving on the board or on the staff of Covered California.
Prohibits a member of the Covered California board or of the
staff of Covered California from being a health care provider
unless he or she receives no compensation for rendering
services as a health care provider and does not have an
ownership interest in a professional health care practice.
This bill:
1.Expands the Covered California executive board from five to
seven with the two additional members appointed by the
Governor.
2.Adds to the areas of required demonstrated and acknowledged
expertise of board members:
a. Marketing of health insurance products;
b. Information technology system management;
c. Management information systems; and,
d. Consumer service delivery research and best
practices.
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FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, SB 972 offers a
solution for addressing the customer service and enrollment
problems many consumers are experiencing when signing up for
health care coverage under Covered California. Many of the
problems consumers are experiencing are the result of problems
with information technology, poor customer service, marketing
to Latinos, and unsatisfactory management of data and
information systems. This has resulted in many negative
consumer experiences, making it necessary for the Legislature
to take action. Because current law limits the areas of
expertise required to serve on the board of directors, the
current board is limited in its experience addressing the
problems Covered California is facing. SB 972 helps Covered
California's board of directors to be better prepared in
facing its organizational challenges.
Latinos in particular are an important population that Covered
California has been unable to enroll in adequate numbers.
According to a recent U.S. Department of Health and Human
Services report, there are 2.8 million Latinos in California
who are eligible and uninsured. However, from October 1st
through January 31st, only 21.4 percent of the total enrollees
in Covered California are Latino. Worst yet, it is estimated
that less than 5 percent of the state's uninsured and eligible
Latino population has enrolled in Covered California. Poor
customer service has been an obstacle to enrollment and
another problem Covered California is facing. There is a
laundry list of customer service issues. The board of
directors would be better prepared to address the problems
Covered California is having with customer service if it had a
member with expertise in customer service research and best
practices.
2.CHCF Report. An April 2014 report published by the California
HealthCare Foundation on Consumers' and Enrollment Counselors'
Experiences with Covered California provides an analysis of
early consumer enrollment experiences associated with the more
than two million Californians who have signed up for health
insurance or applied for Medi-Cal through Covered California.
Researchers conducted interviews and focus groups during a few
weeks in February 2014 with a diverse group of users,
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including participants applying online, by telephone, or in
person. The goal of the research is to identify areas for
improvement in the application process.
Among the key findings were that many consumers were unaware
that in-person enrollment assistance was available, some
enrollees were surprised by how much documentation was needed
and found it to be difficult. The burden delayed successful
completion of the process for many people, especially Medi-Cal
applicants, and Covered California's online chat feature did
not work for anyone surveyed. Specific to the Latino
population were concerns about immigration problems and losing
their home to Medi-Cal. According to the report, the detailed
questions about family members, even those not applying for
coverage, unsettled some Latino consumers and made them worry
they could face problems with immigration. Also, some Latino
consumers had heard Medi-Cal could take their home if they
enrolled in the program. Many Vietnamese and Mandarin
speaking consumers could not enroll online in their primary
language, which was frustrating because some preferred to
enroll online. They had to rely on an English proficient
family member or apply in person with a Certified Enrollment
Counselor (CECs) or agent who could speak their primary
language. Additionally, CECs did not feel well trained and
said they had limited ability to help Medi-Cal applicants. A
new dedicated call center line for CECs was helping, but many
felt on their own to figure out complex enrollment problems.
Many also had limited experience with Medi-Cal and felt they
could do little to help clients. Since the research was
conducted in February, Covered California hired 350 additional
service center employees, increased bilingual Spanish speaking
staff, increased online chat resources, including Spanish
chat, and is expanding telephone line capacity, posting
qualified health plan (QHP) applications in Spanish, Chinese,
Vietnamese, and Korean on the website, adding consumer
information including searchable Frequently Asked Questions,
requiring agents and CECs to complete annual recertification
training, and creating a dedicated help line for Certified
Insurance Agents (CIAs).
3.Board Diversity. The author's office has submitted an article
written by California State Controller John Chiang published
in the Corporate Governance Advisor March/April of 2010 called
Strength in Diversity: The Changing Boardroom. In the
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article, which focuses on corporate diversity for investment
strategies, the Controller writes that he asked the CalPERS
Board to commission a study on board diversity in an effort to
find empirical evidence that different combinations of talent
can lead to increased shareowner value. According to the
article, the report indicates that companies without ethnic
minorities and women on their boards eventually may be at a
competitive disadvantage and have under-performing share
value.
4.Covered California Launch. Covered California opened for
enrollment October 1, 2013. Enrollment reports indicate 30,830
enrolled in October, 78,377 enrolled in November with a jump to
400,096 in December or about 12,096 per day. As of January 15,
625,564 individual health plans had been selected. While the
California launch was a success, it was not without issues. As
reported by Covered California, 40 percent of those surveyed found
the overall enrollment process difficult to complete. Covered
California identified a number of challenges and opportunities
based on the October-December period. Tremendous interest in
Covered California created high service center volume and some
unanticipated drivers of service center volume included: slow
ramp up of service channels (e.g. agents and enrollment
counselors) limited the success of ground efforts; service center
staffing levels for Covered California and QHPs were inadequate;
issues with inaccurate and undelivered notices left consumers
waiting for verification of enrollment status; and "One touch and
done" assumption was not correct for consumers. With this
analysis, Covered California identified an opportunity to improve
operational performance for the remainder of open enrollment with
a focus on high potential demand in March. In the six months from
the beginning of open enrollment to the end of open enrollment the
number of CECs, 58 percent of whom are Spanish speaking grew from
772 to 5,598. In addition, the number of CIAs grew from 3,810 to
12,236.
Through the end of March, enrollment was at 1,209,791. Medi-Cal,
which allows people to enroll throughout the year, enrolled 1.9
million people during this same period, including 1.1 million who
enrolled through Covered California and county offices. Due to
technical difficulties in the final month of open enrollment,
Covered California allowed people who had started applications by
March 31 to complete those applications until April 15. As of
April 15, 2014 a total of 1,395,929 Californians have enrolled in
Covered California including selecting plans during the first open
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enrollment period, which is 241 percent of Covered California's
base enrollment projections for March 31.
5.Enrollment by Ethnicity and Race. The table below provides
data for the total six month open enrollment period with an
additional 15 days for completion of applications. The table
shows that base projections lagged in the first three months
for the Latino and Black/African American populations but by
the end of the enrollment period exceeded base projections.
--------------------------------------------------------------------------------------------------------
| |Base |Total |Total |% of Total |% of Total |Performance |
| |Projection |Enrolled with |Enrolled with |first three |4/15/14 |to date |
| |for 3/31/14 |Plan |Plan |months | |4/15/14 (% of |
| | |Selection in |Selection on | | |base |
| | |first three |4/15/14 | | |projection) |
| | |months | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|White |194,000 |179,615 |386,501 |43.7% |35.4% |199% |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Asian |83,000 |92,142 |230,352 |22.4% |21.1% |278% |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Latino |265,000 |74,090 |305,106 |18% |28% |115% |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Black/African |22,000 |10,867 |30,774 |2.6% |2.8% |140% |
|American | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Other |16,000 |38,253 |121,875 |9% |11.2% |862% |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Total |580,000 |410,967 |1,090,608 | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Unknown | | |305,321 | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| | | |1,395,929 | | | |
--------------------------------------------------------------------------------------------------------
After the first three months, Covered California increased
investment in Spanish language marketing efforts by $4.5
million with a focus on media vehicles that perform best with
Spanish speaking target audience and key markets with high
concentration of Latinos. In addition Covered California
partnered with Univision and the California Endowment.
Dolores Huerta, co-founder of the United Farm Workers was
enlisted to produce radio spots and videos available on
YouTube, in English and Spanish, calling on Latinos to sign up
for insurance. A targeted on-the-ground strategy was developed
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in collaboration with Covered California's community partners
to create face-to-face opportunities for enrollment,
particularly in Latino communities in Los Angeles, the Inland
Empire, and the Central and San Joaquin valleys.
6.Related legislation. SB 1052 (Torres) requires Covered
California to evaluate and report on the effectiveness of the
activities undertaken to market and publicize the availability
of health care coverage and federal subsidies, as well as
outreach and enrollment activities, including populations that
may experience barriers to enrollment, such as the disabled
and those with limited English language proficiency.
Prohibits a plan from being selected as a QHP participating on
Covered California if it does not post searchable formularies
on its Internet websites that are standardized and meet
certain specifications. Requires Covered California to link
to QHP formularies and create a search function for potential
enrollees to search by drug and therapeutic category.
7.Prior legislation. SB 900 (Alquist), Chapter 659, Statutes of
2010, and AB 1602 (Perez), Chapter 655, Statutes of 2010,
established the California Health Benefit Exchange.
8.Support. The California Primary Care Association writes in
support that California implemented perhaps the most
successful Affordable Care Act (ACA) outreach and enrollment
program in the nation, however, Covered California's
activities were not without fault. Early efforts to enroll
the large uninsured Latino population into Medi-Cal or the
Exchange were largely ineffective and board members with
expertise in marketing, IT, management information systems,
and consumer service delivery research will help assure that
no eligible population will be overlooked. The Latino
Coalition for a Healthy California writes that this bill is a
step in the right direction and will help improve the customer
service and enrollment experience.
9.Concerns. The California State Council of the Service
Employees International Union (SEIU) expresses concerns and
suggests a broader discussion may be merited to address the
stated concerns of the author to improve the board's
diversity. SEIU locals were central to the implementation of
the ACA in California and shared serious concerns about
strategies that fell short with respect to outreach and
enrollment of Latinos and other communities of color in
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California. However, Covered California's staff and board
have shown a willingness to be responsive to input.
Additionally, as drafted, the various qualifications outlined
in the bill could inadvertently have the opposite effect.
Specifically, the need to recruit board members from the
highly technical profession of IT systems management, customer
service research and health insurance marketing may actually
result in a board that is less racially and ethnically
diverse, and would not directly address the issues
representing the diversity of California's populations.
Finally, the composition of the existing Covered California
board was carefully considered during the drafting of SB 900
and AB 1602 in 2010. The balance of the appointments to the
board is shared between the Executive and Legislative branches
of government. SEIU hopes that the Legislature would consider
maintaining that balance as it considers any changes in the
number of individuals serving the board. The Western Center
on Law and Poverty, which reports pushing Covered California
to translate its application and printed materials, have a
Spanish website, offer and employ bilingual staff and certify
bilingual enrollment counselors, writes that while a laudable
goal, Western Center is concerned that this bill will not help
address the stated motivation. Western Center is not
persuaded that adding these technical areas of expertise will
increase the diversity of the board. Health Access
California, which strongly concurs that Latino enrollment in
Covered California is not as high as it should be, seeks
amendments to require Covered California to provide sufficient
in-person assistance and enrollment counselors, to target
marketing to communities under-represented among enrollees, to
design additional enrollment systems that do not require
consumers to enroll on-line, and to provide more application
materials in languages other than English.
10.Oppose. The Service Employees International Union Local 1000
has grave concerns about making changes in the board structure
at a critical time in Covered California's growth. The
current board has been a leader not only in the state but
nationally as well. Adding additional members at this time
could possibly interfere with what has been a relatively
smooth administrative process where board and staff have
seemed to figure out how to resolve tough issues in a timely
manner. SEIU 1000 believes there is something to be said for
stability during this initial period.
11.Board Diversity. This bill does not ensure or guarantee
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additional ethnic or racial diversity on the board. Existing
law already requires appointing authorities to take into
consideration the cultural, ethnic, and geographical diversity
of the state so that the board's composition reflects the
communities of California. If diversity of the board is an
objective, the appointing authorities could be encouraged to
seek more diverse candidates upon expiration of the terms of
existing board members, including through the Senate
confirmation process. Furthermore, as drafted, this bill
doesn't require the new appointees to have the technical and
marketing expertise suggested by the author. This bill also
does not take into consideration actions by the Covered
California board and staff to make course corrections with
regard to outreach, enrollment and customer service
activities, which have shown progress toward enrollment among
the Latino population, improvements in customer service and
made California a leader in implementation of the ACA.
12.Board Appointments. Currently the Governor holds two
appointments for the board of directors for the legislatively
created Covered California. The Secretary of Health and Human
Services, also appointed by the Governor is a third board
member. The final two members of the board are appointed by
the Legislature. This bill proposes to tip the balance
further in the Governor's favor by creating two more
Governor's appointments.
13.Alternative Solutions. The committee may wish to amend this
bill to focus it more directly on policy changes that will
increase enrollments among hard to reach populations and also
improve customer service for those populations.
SUPPORT AND OPPOSITION :
Support: California Latino Legislative Caucus
California Primary Care Association
Latino Coalition for a Healthy California
Oppose: Service Employees International Union Local 1000
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