Covered California's Outreach Budget Is Huge, Despite Federal Cuts

The Obamacare-created public health exchange is ramping up outreach, especially to younger people and minority groups.

Covered California director Peter Lee says educating people about their options is especially important now, given the threats from the federal government to shut exchanges down. He called from a tour bus that’s making 22 stops over the next week to spread the word about open enrollment.

“We’re pounding the drum to say 'ya know, things in Washington take time, the Affordable Care Act  is the law of the land, it’s on the books and it can’t be changed without an act of Congress. That has not happened.'”

Last year his organization spent $100 million on marketing. This year they’ve allocated $111 million.

This August, President Donald Trump slashed the federal advertising budget for public health exchanges by 90 percent, from $100 million down to just $10 million. And that’s to cover the 39 states that enroll residents through HealthCare.Gov.

California has its own budget, and it doesn’t draw on state or federal funds. Instead, funding is supplied by participating health plans. For every enrollee that signs up for health care through the exchange, the plan pays Covered California 4 percent of that person’s calculated premium.

Kevin Knauss is an independent insurance agent in Northern California who sells insurance both on and off the exchange. 

“They want as many people to go through the exchange as possible, even if you don’t get a tax credit, because that’s 4 percent they lose.”

Still, he says, it’s important to get the word out about shopping for plans, especially with all the confusing changes this year. Federal subsidies were cut this month, and some California shoppers will see big premium jumps because of it. 

New York is spending $27 million in advertising for its own exchange, which covers 3.6 million people. Roughly 1.3 million are enrolled in Covered California.

Michael Luja, former president of the California Association of Health Underwriters, said Covered California's marketing campaigns have been widely successful in the past and are crucial right now.

"California is in a defensive posture. Our story is different in California than the national narrative," he said. "It’s a smart move, recognizing that you’ve got to do ongoing continued marketing, and also in suspense of the mis - and dis- information that’s out there about whether or not the exchange and Obamacare is still alive."

Lee says advertising to younger, healthier people will stabilize the exchange in the long run.

“Because if you spend more money, you actually get more healthy people ensured in coverage, and that healthy enrollment lowers premiums for all Californians”

While in most states the open enrollment period was shortened to end Dec. 15, California's will continue until Jan. 31.