Strengthening California’s Public Option: Covered California

“California already has a public option, it’s called Covered California.” 

During the recent unveiling of his proposed budget, which includes significant initiatives to improve California’s health care system, Gov. Gavin Newsom voiced what many have been saying in California for years. Covered California is a “public option,” created by state leaders, which provides “extensive vetting and negotiation with health insurance companies on premiums, networks, benefit design and quality” to benefit consumers across the state.

California’s marketplace is publicly accountable with a public board that holds us responsible. Covered California holds the 11 health plans we contract with to high standards and makes THEM publicly accountable. Among those plans are statewide carriers that are both non-profit and for-profit; we have public plans such as L.A. Care and Valley Health Plan which are locally accountable to their communities; and regional carriers such as SHARP Health Plan, Western Health Advantage and Chinese Community Health Plan, which serve a growing number of people in their areas.

Covered California leveraged its role to create and foster a marketplace where consumers are the drivers of the market – plans compete and are held accountable. As we recently noted in our report, “Covered California Holding Health Plans Accountable for Quality and Delivery System Reform,” we hold our 11 contracted health insurers accountable for fostering better quality, healthier populations, lower costs, and better care delivery. We select who can participate in the marketplace and put them through an array of reporting and performance requirements. Major highlights include:

• Requiring insurers to promote advanced primary care as well as integrated and coordinated care which studies increasingly show result in positive outcomes.
• Requiring insurers to make significant investments in marketing and outreach, which promotes healthy and stable enrollment and helps keep costs low for consumers both on- and off-exchange and fosters robust choice among plans.

These are just the tip of the iceberg, and I encourage you to read our full report for a complete look at the many ways we are holding health plans accountable. 

The results have been significant, and we are proud of what we have achieved on behalf of the millions of people who have utilized our coverage and benefited from our work. Since we first opened our doors in 2014, California has seen:

• The largest drop in the uninsured rate of any state in the nation.
• Stable participation by health insurers, giving 75% of consumers the ability to choose between four plans or more.
• Saved unsubsidized enrollees more than $1,000 annually, with estimated savings to enrollees and the federal government of $12.5 billion thanks to robust competition and healthier enrollment.
• Two health insurance companies with integrated delivery systems, Kaiser Permanente and Sharp Health Plan, rank in the top 10 percent of all U.S. health insurers in most measures of quality.
• A quarter of Covered California enrollees being cared for in an Accountable Care Organization (ACO) in 2018, far exceeding state and national benchmarks.
• Important gains in hospital patient safety, in the prevention and treatment of opioid use disorders and in the reduction of low-risk C-section rates.

Through Covered California’s accountability, we are raising the bar for all our health plans. We look forward to the Gov. Newsom’s plan to leverage both Covered California and Medi-Cal (California’s version of Medicaid) to “build an even more robust public option” in the state as we continue to move toward universal coverage.