Covered California Board About To Get Makeover

Three of the five Covered California Board of Directors seats are about to get newly appointed occupants in a shift that could have significant influence on the future of the four-year-old health insurance exchange.

Two seats are becoming vacant because of expired terms and a third is open following a resignation. 

Robert Ross, president and CEO of The California Endowment, announced his resignation last month, effective Dec. 31, 2014.

Susan Kennedy and Kim Belshé, appointed by former Republican Gov. Arnold Schwarzenegger, have agreed to stay in their seats until Gov. Jerry Brown (D) names replacements. It’s possible Brown may ask one or both to serve again.

Ross, an African-American appointed by the California Senate, was the only minority on the board. Many experts expect the Senate, now led by the first Latino in more than a century, to appoint another minority.

Dylan Roby, director of Health Economics and Evaluation Research at UCLA Center for Health Policy Research, predicted the Senate will appoint a Latino.

“Given California’s high Latino population and the trouble that Covered California had reaching Latinos last year (the Covered California enrollees did not reflect the demographics of the state when it came to Latino enrollment), I would expect a Latino/a to be named to that seat,” Roby said in an e-mail.

Senate Seat Up First

Because Kennedy and Belshé agreed to stay on the job while Brown decides what to do, Ross’ vacant seat will probably be the first to be filled.

California’s 2010 law establishing the first state-run exchange under the Affordable Care Act calls for the Senate and Assembly to appoint one director apiece, the governor appoints two and the fifth seat is automatically occupied by the secretary of the California Health and Human Services Agency.

Kevin de León (D-Los Angeles), installed last month as Senate President Pro Tempore, will play a major role in picking and ushering in the Senate’s choice.

Anthony Wright, executive director of Health Access California, hopes de León and Brown choose people with philosophical outlooks similar to those on the board now.

“We hope that new appointees continue the consensus that California should lead in improving the health care system,” Wright said. “I think the first board was clear that California doesn’t just want to implement the new law, it wants to lead in achieving the goals of the ACA.”

Wright suggested Brown and de León might consider “people with some knowledge and background around IT (information technology) or marketing. Those are both areas where Covered California has had to put a lot of focus,” Wright said.

“The authorizing law has strong conflict-of-interest language to prevent board members from being active parts of the health care industry,” Wright said. “While that has limited the potential pool of board members, it’s an important protection.”

As a result of a bill signed into law last year, qualifications to serve on Covered California’s board were broadened to include experience with IT, insurance marketing and enrollment in poor and minority communities.

Rep.-elect Norma Torres (D-Calif.), who authored SB 972 as a state senator, told the Associated Press: “With three board seats open, the governor and [state] Senate now have an opportunity to implement SB 972 in the way it was intended: by appointing a new majority to the board that is more representative of California’s population, particularly those who need insurance.”

Handicapping Possible Appointees

While consumer advocates and industry experts are hesitant to name names, a few specific individuals did rise to the surface as possible candidates.

“It would be nice to sit back and look at all five seats and fill specific gaps in expertise or experience, but the state Senate and governor are probably unlikely to actively coordinate the selection of up to three new members,” Roby said. “Last year, there was a call for more diversity on the board, as well as a call for an information technology expert. However, when you are thinking about the short-list of people who may be suitable, you are trying to figure out if they have conflicts of interest, are willing to do it and would represent the Covered California membership well, you can’t necessarily select people because they have a very specific skill that may have been necessary last year.”

Roby mentioned three possible candidates.

“Howard Kahn, who is retiring from LA Care this month might be a good person to consider or perhaps another retired former leader of an insurance carrier in California or elsewhere,” Roby said.

“If it’s difficult to find someone with that insurance carrier experience who doesn’t have a conflict of interest, having an academic health economist who has followed insurance markets very closely might be a good compromise,” Roby said.

“Gerald Kominski at UCLA (director of UCLA Center for Health Policy Research) Will Dow (Professor of Health Economics at UC-Berkeley, and an expert on risk adjustment and behavioral economics) would both be phenomenal, analytic voices to add to the Exchange board,” Roby said.

New Fiscal Reality

Whoever occupies the five Covered California directors’ chairs will be facing a new set of fiscal guidelines. The ACA called for federal funding for the first four years but state exchanges are supposed to become self-sufficient thereafter. In California’s case, that means starting last week, Covered California will be paying its own bills with state money.

“That new reality should probably be part of the discussion when new appointments to the board are considered,” Wright said

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