September 14, 2012:
The meeting came to order, the five members of the California Health Benefit Exchange seated onstage with dozens of consumer advocates and others looking on. On the agenda: what to name the online marketplace where millions of residents will be able to shop for medical coverage under President Obama’s health care law.
An adviser presented the options, meant to be memorable, appealing and clear. What about CaliHealth? Or Healthifornia?
“I am kind of drawn to Avocado,” declared Kim Belshé, a member of the exchange’s board of directors, which is hustling to make dozens of decisions as the clock ticks toward deadlines set by the law.
Delay and outright resistance to the health care overhaul might be the norm in much of the country, but not here. California — home to seven million uninsured people, more than any other state — is at the forefront of preparations for January 2014, when a controversial requirement that most Americans have medical coverage or pay a penalty takes effect.
So far, only 13 states and the District of Columbia have told the Obama administration they intend to set up the insurance exchanges that are supposed to provide a marketplace for people to buy health plans. None are being watched as closely as California, whose singular challenges, from the size, diversity and geographic spread of its uninsured population to its vast budget problems, make it stand out. Many feel a successful rollout here could convince other states with high numbers of uninsured residents that the law can be made to work for them.
“We are the example,” said Anthony Wright, executive director of Health Access California, an advocacy group. “If it can be done here, it can be done anywhere.”
The California Health Benefit Exchange has already hired 50 employees and is poised to hire 50 more. Construction of the Web portal through which some three million people are expected to buy insurance by 2019, and through which many others will likely enroll in Medicaid, is under way.
This fall, the board will seek bids from insurers to sell plans through the exchange, and it intends to have the portal up and running by next summer, several months before enrollment starts in October 2013.
Realizing that much of the battle will be in the public relations realm, the exchange has poured significant resources into a detailed marketing plan — developed not by state health bureaucrats but by the global marketing powerhouse Ogilvy Public Relations Worldwide, which has an initial $900,000 contract with the exchange. The Ogilvy plan includes ideas for reaching an uninsured population that speaks dozens of languages and is scattered through 11 media markets: advertising on coffee cup sleeves at community colleges to reach adult students, for example, and at professional soccer matches to reach young Hispanic men.
And Hollywood, an industry whose major players have been supportive of President Obama and his agenda, will be tapped. Plans are being discussed to pitch a reality television show about “the trials and tribulations of families living without medical coverage,” according to the Ogilvy plan. The exchange will also seek to have prime-time television shows, like “Modern Family,” “Grey’s Anatomy” and Univision telenovelas, weave the health care law into their plots.
“I’d like to see 10 of the major TV shows, or telenovelas, have people talking about ‘that health insurance thing,’ ” said Peter V. Lee, the exchange’s executive director. “There are good story lines here.”
Although the exchange will not start advertising until next year, the California Endowment, a foundation that has spent $15 million promoting the law, is running newspaper and television ads, including one in which the television personality Dr. Mehmet Oz exhorts viewers to “get educated, get engaged, get enrolled.” That campaign has targeted Hispanics, who make up more than half of the state’s uninsured population.
But for all the progress, California’s intractable budget woes loom as a threat to implementation here. Even with the federal government financing most of the insurance expansion, the state’s contribution could exceed $2 billion a year, according to an estimate that was made by the administration of Gov. Arnold Schwarzenegger, a Republican, who signed the legislation creating an insurance exchange here in September 2010, earlier than any other state. Diana S. Dooley, the state’s Health and Human Services secretary, said the administration of Gov. Jerry Brown, a Democrat, was working on a new estimate.
Mr. Brown, while supportive of the law, has not spent much time talking it up publicly, in part, Ms. Dooley said, because he is “absolutely laser-focused on getting the budget balanced.”
To help close a $16 billion deficit, Mr. Brown made more than $1 billion in cuts from Medicaid and other health programs even though about a million of the Californians expected to gain coverage through the health care law by 2019 would get it through a prescribed expansion of Medicaid. (Those who buy private insurance through the exchange will be able to get federal subsidies to help cover the cost if they earn up to four times the federal poverty level, or currently $92,200 for a family of four.)
Mr. Brown is hoping voters will approve a package of temporary tax increases in November to avoid $6 billion more in cuts. Ms. Dooley said that without the tax package, carrying out the health law might be at risk, including the expansion of Medicaid.
“I wouldn’t characterize it as all bets are off,” she said. “I’m just saying nothing is protected.”
The exchange itself has so far been financed by three grants, worth $237 million, from the federal government. Most of the money is committed to consultants, including Accenture, which has a $327 million contract to build and support the initial operation of the enrollment portal.
Ms. Dooley said getting the enrollment system up and running in such a tight time frame was one of her biggest worries. The other, she said, was making sure the health plans sold through the exchange were affordable. The federal law lists 10 categories of “essential health benefits” that plans sold through exchanges must provide, but Ms. Dooley said those categories “go beyond what I would call essential.”
“It’s all good for consumers,” she said. “But somebody’s got to pay for it, and that’s going to go into the premium.”
Despite the full-throttle approach here, another uncertainty is the outcome of the presidential race. Mitt Romney, the Republican nominee, has vowed to repeal the health care law and restructure Medicaid, not only scrapping the planned expansion but making the program much leaner. Even without a repeal, Republicans could undo the federal subsidies and other financing for the law if they won the presidency and even a narrow majority in the Senate.
“If the federal funding stopped,” Mr. Lee said, “we would be at a ‘press reset’ button.”
In a Field Poll released on Aug. 20, 54 percent of California voters said they supported the health care law, compared with 37 percent who said they were opposed. Support was strongest among blacks (88 percent) and Hispanics (67 percent), who together make up more than 44 percent of the state’s population. Voters of Vietnamese and Korean descent also firmly supported the law, but white and Chinese voters were more divided. The poll of 1,579 voters, conducted in July, has a sampling error of plus or minus 3 percentage points.
Only 17 percent of respondents said they had seen, heard or read anything about the insurance exchange though. Still, 75 percent of those who are not insured through their employer or Medicare said they would be interested in using the exchange to shop for health insurance.
Mr. Lee said the fact that few people had heard of the exchange was “totally unsurprising.” A catchy new name might help spread the word, he said; a decision on Avocado and the other finalists should come next month.
“The fact that very few people have heard about us isn’t an issue,” Mr. Lee said. “Come back in a year.”