How Obamacare’s California Success Architect Achieved the Impossible
You could say that service in the name of public health was etched in the bones of Peter V. Lee.
Her father, also Peter Lee, founded the Department of Family Medicine at USC and spoke out in favor of the enactment of Medicare in 1965, a position that prompted some members of the alumni association of the university to request his dismissal.
His uncle, Phillip R. Lee, helped create and implement Medicare as an officer in the Department of Health, Education and Welfare, and later became Chancellor of the UC San Francisco and returned to Washington to serve President Clinton as Assistant Secretary of Health.
Improving health care is an eternal endeavor in America.
Peter V. Lee, Executive Director, Covered California
So Lee’s 2011 appointment as the first executive director of Covered California, the state’s affordable care marketplace, seemed almost pre-arranged. The September 16 announcement that Lee, 62, would be withdrawing from the exchange in February, provides a perfect opportunity to take stock of the state’s extraordinary success in health care reform over the past decade, as well as looking to the future.
Lee came to work with more than a family pedigree: originally from Pasadena with an undergraduate degree from UC Berkeley and a law degree from USC, he had started his career in public health programs at the National. AIDS Network in Washington in the 1980s.
He later served as executive director of the Center for Health Care Rights, a Los Angeles-based consumer advocacy group, and then spent eight years as CEO of the Pacific Business Group on Health, a coalition of healthcare buyers. public and private health, before working on health care reform in the Obama administration.
Under his leadership, Covered California was perhaps the most successful ACA market. The exchange’s approach to coverage has helped California reduce its population of uninsured adult residents by nearly 11 percentage points, to 7.7% in 2019, the second-best record in the country and to just one hair of the leader, Nevada.
Residents of states that have resisted the ACA, such as Texas and Florida, still struggle with uninsured rates of 15% or more.
California stock rate hikes have consistently been below the national average, including a preliminary 1.8% hike slated for 2022 plans and an average annual rate hike of just 1.1% over the past three years. years. Its offers have been remarkably stable, with 12 insurers expected to offer plans through the exchange in 2022, including four offering cut premiums from 2021 – Anthem Blue Cross, LA Care, Molina and Sharp.
The advent of the Affordable Care Act marked what Lee calls “a major pivot as a nation” in health care. Until then, in the individual market, “insurers wrote their own rules. They were like, ‘I’m going to offer these benefits to some, I’m going to turn down these people but not these people. not to provide mental health benefits.
The ACA aimed to put an end to these practices. It demanded that carriers spend at least 80% of their premiums on medical claims and improving the quality of care, banned denial or overcharging of coverage for people with pre-existing health conditions, and a required carriers to cover a menu of essential benefits, including prescriptions, hospitalization, and maternity and mental health services.
Covered California, however, has gone further, Lee told me. It has established itself as an “active” stock exchange setting rules of service and quality to be respected by participating insurers, in many cases more stringent than the rules of the ACA. The ACA’s plans in California had to be standardized more strictly than required by the ACA.
The plans at each level of metal – bronze, silver, gold, and platinum – had to be identical to each other, narrowing consumers’ choice to two basic factors – plan premiums and their provider networks. (Covered California has made every effort to ensure that no matter how narrow an operator’s provider networks, all the required benefits are available.)
The exchange upset the traditional approach of insurers of pocketing profits, which was supposed to discourage clients from seeking treatment.
“Our design was, as much as possible, to encourage people to receive the right care at the right time, not to discourage them,” said Lee. “We didn’t want financial barriers to accessing a primary care doctor. If you take out a money plan, there is no deductible unless you are admitted to the hospital.”
California insurers must disclose each year the steps they have taken to reduce health disparities between ethnic, racial and income groups, to curb high supplier and drug prices, and to meet other health goals. quality.
Insurers might have hesitated at first, but they also understood that on a level playing field in California and given the state’s efforts to attract the largest pool of coverage, they had a better chance of making losses. profits than in many other states.
It wasn’t until 2017-2019 that rates rose more than 4.2% due almost entirely to the Trump administration’s efforts to sabotage the individual market during those years. Even so, customers who shopped might reduce their rate increase or even find lower rates year on year.
Lee didn’t do all of this on his own, of course. He was strongly stimulated by the Californian political context. It started with the foursquare embrace of the ACA by the government of the day. Arnold Schwarzenegger, who had been trying since 2007 to develop a universal health care program for the state.
After Jerry Brown took office as governor in 2011, the state expanded Medi-Cal, its Medicaid program, to take advantage of the ACA’s 100% federal grant for expansion. (Twelve states, all under Republican control, have still not extended Medicaid despite clear signs the move saves money and improves health.)
California has also created its own market for individual coverage instead of leaving the task of registration and marketing to the federal government, as 35 states have.
California’s choice inoculated him with cutting Trump’s marketing and outreach funding to near zero; While the Trump cuts were in place, California continued to spend some $ 100 million a year on marketing to encourage younger, healthier residents to enroll.
Funding came from a 3.25% assessment of the health plans. It got passed down to registrants, but as the greater number of California members kept the bonuses 20% lower than they could have been, Lee said, the evaluation paid for itself- same.
Legislative initiatives have further mitigated the Trump effect. California has banned short-term health plans promoted by the Trump administration, which fell outside the purview of the ACA.
These plans were cheaper than the ACA compliant plans, but only superficially. They are allowed to refuse applicants with pre-existing health conditions and to offer only limited benefits. Enrollers diagnosed with costly conditions or serious injuries often discover coverage gaps too late.
“We weren’t going to allow plans that are cheaper because they’re crap,” Lee said.
The Trump years have been trying for Lee and Covered California. If the Republicans had succeeded in repealing the ACA, as Trump and the GOP establishment intended to do, “we didn’t have a plan B,” says Lee. “Health care in America requires federal dollars and federal consistency. Without it, no state can compensate for it, even California. It would have been a new future and millions of Californians would have been without health insurance. “
California has also passed more generous grants than the federal government, covering households with incomes up to 600% of the federal poverty line (or up to $ 159,000 for a family of four this year) rather than just up to 400% ($ 106,000 for a family of four); the state’s initiative was superseded by improved subsidies promulgated as part of the Biden administration’s US bailout.
The state has gradually extended Medi-Cal coverage to more residents without legal immigration status – starting with children up to age 18 in 2016, to young adults up to age 26 in the year last and adults up to 50 years from May 1st.
This reflects the recognition, reinforced by the experience of the pandemic, that “you cannot draw a small island around your next door neighbor and say,” You are undocumented, so I shouldn’t worry about your. health care. If we have people living here who contribute to society and get sick because they don’t have insurance coverage, we’ll all foot the bill when they show up to the emergency room, or when they go to work. in a restaurant and make people sick. “
California’s dependence on its own market gives it extraordinary flexibility to provide coverage in critical situations. In 2019, the legislature permanently extended Covered California’s open enrollment period, during which all clients can enroll unconditionally for the following year, from November 1 to January 1. 31. This protects state residents from the type of open listing manipulation practiced by the Trump administration as a means of keeping listings low.
After the pandemic struck, Covered California was able to extend open enrollment until May 15, 2021. After the American Rescue Plan extended premium subsidies for the individual market, the state exchange opened a special enrollment period until the end of this year for uninsured residents and those whose plans are not eligible for grants.
After 10 years, the health reform is still under construction. “Improving health care is an eternal endeavor in America,” Lee told me. We have taken a giant step forward with the Affordable Care Act to make it fairer and more equitable. The rate of uninsured was 7.7% in 2019, among Latino residents it was 12.66%.
Lee hasn’t said what he plans to do in his next act. He says he gave Covered California six months to allow his board to launch a nationwide search for his successor, and to give him time to negotiate the next swap deal. with carriers, which will take effect in 2023. He says his thoughts turned to move on after the deaths of his mother and uncle Phillip last year.
“I have been involved in health care since the AIDS epidemic, and always will be,” he says. “I do not know how.”
This story originally appeared in the Los Angeles Times.