Covered California on death watch as enrollment fails to reach sustainability

By Rob Janicki

California's state exchange for Obamacare, called Covered California, is in deep financial trouble, even after spending an unbelievable $1.1 BILLION dollars in federal setup money.  It's hard to imagine how a state could bungle such an astronomical number of dollars and run it right into the ground, but California liberals are quite practiced in creating such fiscal disasters.  All one has to do is look to the state's own in-house annual ongoing fiscal budget disaster to understand how mismanagement has become a way of life for liberal politicians in the Golden State.  

Back to Covered California on life support.

Indeed, there’s no more money coming from Washington after the state exhausts the $1.1 billion it received from the federal government to get the Obamacare exchange up and running. And state law prohibits Sacramento from spending any money to keep the exchange afloat.

That presents an existential crisis for Covered California, which is facing a nearly $80 (sic $80 million) budget deficit for its 2015-16 fiscal year. Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California Executive Director Peter Lee acknowledged in December that there are questions about the “long-term sustainability of the organization.”

Looking further into the numbers reveals just how tenuous the existence of Covered California really is.

The state auditor’s warning appeared prescient as of Feb. 15, which was supposed to be the close of open enrollment for 2015: Covered California had fallen 300,000 enrollees short of the goal set by Mr. Lee and the agency’s board of directors.

Indeed, Covered California’s enrollment growth for 2015 was a mere 1 percent, according to a study this month by Avalere Health. That was worst than all but two other state exchanges. Meanwhile, California’s Obamacare exchange managed to retain only 65 percent of previous enrollees, the nation’s fourth-lowest re-enrollment rate.

No one can be certain what the end will look like for Covered California.  Will it die with a groan or a flurry of fireworks or will it somehow limp along for another year.  Since this is virgin political territory there is no certainty of what the final outcome will look like.  Whatever the outcome, it will not be a good one for consumers depending upon Covered California.

A problem with Covered California is that it's just one level above the state version of Medicaid, called MediCal, which serves those below a designated poverty level.  In both cases of Covered California and Medi-Cal, there is limited coverage in terms of medical providers willing to accept either insurance program.  I can attest to this since the urology group I visit twice a year does not accept Covered California.

More news on the condition will be seen in the coming weeks as we see whether enrollments somehow spike astronomically to keep Covered California on life support and sustainability.