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California senator seeks audit of state Obamacare exchange

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Part 90 of 95 in the series Obamacare

LET’S INVESTIGATE: California state Sen. Ted Gaines wants an investigation into Covered California’s spending after a Watchdog.org article brought to light a web stream featuring a gyrating fitness guru Richard Simmons.

 

By Tori Richards | Watchdog.org

A California senator is seeking to audit the state’s Obamacare exchange after a Watchdog.org story revealed that $1.37 million was spent on a campaign featuring an eight-hour web stream starring a gyrating Richard Simmons.

The Jan. 16 event — now immortalized on YouTube — showed celebrity fitness trainer Simmons writhing on the ground to an MC’s chant of “Get Covered, hashtag, uh-huh,” a reference to Covered California, the state exchange. At one point, he snuggles up to a contortionist following a dance-off.

Covered California faces a $78 million deficit during the next fiscal year due to cutbacks in federal funding. Gaines learned of the $1.37 million campaign cost from Watchdog.org. He had previously sought to obtain the information from Covered California Director Peter Lee, but received no response.

“What a waste of money — oh, my gosh,” state Sen. Ted Gaines said in an interview. “I looked at the video and was blown away that they would spend money on that. And for them to think that people would want to sign up for health insurance from seeing it? Give me a break.”

Gaines formally requested the audit Thursday in a letter addressed to the chairman of the Joint Legislative Audit Committee. It was the same committee that recently discovered the exchange’s budget shortfall. The exchange was audited about a year ago, but it didn’t reveal the deficit or analyze funds spent on public outreach, so another audit should be conducted, Gaines’ spokeswoman, Betsey Hodges, said.

SIGN UP PLEASE: Richard Simmons' Covered California video is meant to lure new customers.

SIGN UP PLEASE: Richard Simmons’ Covered California video is meant to lure new customers.

“Covered California recently spent $1.3 million on a widely mocked infomercial featuring Richard Simmons,” Gaines wrote. “I fear that this is evidence that the Exchange shows little regard for the precarious fiscal condition it faces.”

Gaines, who is vice chairman of the Senate Standing Committee on Insurance, said Covered California didn’t appear to have a plan to fill in the deficit, and he fears that policy holders will be stuck with a massive rate increase.

“It is stunning to me that a Department this new and this small could be facing a deficit this big without a plan to cover it,” Gaines wrote. “In light of this deficit (and) the seemingly ill-advised informercial … an examination of the Exchange’s finances is in order.”

Covered California responded by saying it received a good rating from its last audit.

“We live up to any federal and state audit requirements,” said Covered California spokeswoman Anne Gonzales. “We are committed to being transparent, and we welcome any opportunity to explain our financial picture to the public, including lawmakers.”

Several steps have to occur before an audit. The Bureau of State Audits will determine a cost based on the scope of the work; Covered California Director Peter Lee and the general public will have a chance to respond to the proposal; and the committee will decide whether to move forward, table the request, or transfer it to another agency.

A hearing is scheduled for Feb. 11.

Covered California’s budget is $399.7 million, of which $102.6 is spent on outreach, a legislative report showed. So far, about half a million people have enrolled.

Contact Tori Richards at tori@watchdog.org and on twitter @newswriter2. 

Part of 95 in the series Obamacare
  1. Obamacare compliance means less money for TN service agencies
  2. The mystery of Obamacare spending in Arkansas
  3. Obamacare raises questions for MD small business owners
  4. Kansas official on Obamacare: ‘Let someone else be the guinea pig’
  5. Obamacare insurance marketplace has plenty of kinks on first day
  6. OR’s Obamacare insurance marketplace hits technological snag
  7. Fail: Day 1 of the New Mexico Obamacare rollout
  8. Senator asks: Do you want this dysfunctional government taking over health care?
  9. Jobs, coverage at risk with Obamacare, MN union health official says
  10. Oregon’s Obamacare ads resemble middle school art
  11. VIDEO: Obamacare vs Affordable Care Act: Comedy triumphs in court of confusion
  12. Patience is key to navigating Illinois’ Obamacare marketplace
  13. Hawaii residents, lawmakers frustrated with health connector glitches
  14. Healthy young, key to Obamacare, aren’t buying it
  15. NM’s health exchange tries to lure ‘young invincibles’
  16. Obama drama: Senator blames governor for big rate hikes
  17. Progressive group navigates Oregon students through Obamacare
  18. Maddening: Trying to log onto federal health care site
  19. You know that one guy who successfully signed up for Obamacare? He didn’t
  20. What’s wrong? It’s been a week, and Obamacare website still not working
  21. HHS Secretary Sebelius back in FL after embarrassing Obamacare rollout
  22. Health centers enroll Floridians in Obamacare as application problems persist
  23. VIDEO: Stewart skewers Sebelius on Obamacare
  24. Obamacare effect? 9 companies exit Nebraska’s health insurance market
  25. Obamacare: Children of undocumented parents face an uncertain future
  26. Which way do we go? Obamacare navigator registration in TN in question
  27. NM health exchange tries to ease problems with Obamacare website
  28. CPA says hype over Obamacare small business tax credit is misleading
  29. Obamacare navigator under fire for arrest warrant
  30. Reports of Obamacare fraud emerge in Tennessee
  31. After two weeks, FL online Obamacare enrollees are hard to find
  32. Illinois state governor touts 100K Obamacare enrollees, all in Medicaid
  33. Kansas lawmaker calls for crackdown on Obamacare navigators
  34. WI health care exchange seeing few getting through
  35. Hawaii’s Obamacare exchange relaunches with more glitches
  36. We’ll know next month how many people in NM signed up for Obamacare — maybe
  37. Zero: Number of Nebraskans Obamacare navigators have signed up
  38. It took this Delaware woman 11 days to sign up for Obamacare – and she was the first
  39. How many people have signed up for health insurance in VA? Who knows?
  40. What else? NM federal health exchange ads stalled due to website problems
  41. Blue Cross hires temp workers to deal with Obamacare glitches
  42. If Obamacare is the next Medicare, will physicians leave en masse?
  43. Three problems that won’t be solved by fixing the Obamacare exchange glitches
  44. Plenty of Oregonians interested in Obamacare, but none can enroll online
  45. Criticize this: Obamacare premiums a near match to WI disclosures
  46. Report: Missourians will see sharp rise in premiums under Obamacare
  47. Kansas navigators say they’ve enrolled no one in Obamacare
  48. Obamacare too costly for rich Coloradans, Democrat congressman says
  49. Study: Kansas premiums to spike following Obamacare rollout
  50. Hang on to your candy: Creepy Uncle Sam is back
  51. Obamacare or bust: NM Watchdog turned back again
  52. Medical journals, experts refute claim that Medicaid cuts ER use
  53. Arkansas spends $4M on Obamacare ads, wants more
  54. LOL: In July video, HHS bragged about being ‘on schedule’ with Obamacare
  55. Illinois uses Day of the Dead to market Obamacare
  56. Sebelius denies GOP’s Terry ‘unreliable’ Obamacare info
  57. About 290,000 Washington residents lose health insurance plans
  58. Broken promise: Obamacare cancels almost 20,000 Kansas health care plans
  59. Top hospitals opt out of Obamacare
  60. Obamacare moves to intensive care
  61. Obamacare provision could lead to more Medicaid fraud
  62. Obamacare: Religious groups want to ‘move mountains’
  63. Obamacare hitting Wisconsin residents with double whammy
  64. Kansas AG: Obamacare threatens consumer privacy
  65. 1,500 in New Mexico have to move out of the high-risk insurance pool
  66. Cover Oregon website fiasco creates jobs, but costs millions
  67. For Florida’s Obamacare small business exchange, it’s crunch time
  68. Only 877 Wisconsinites have signed up for Obamacare, federal report says
  69. Just 172 in NM have completed Obamacare applications: ‘Woefully inadequate,’ says NMIX board member
  70. With only 346 Oklahomans signed up, leaders decry ‘Obamacare debacle’
  71. Defying Obamacare: ‘Send them the bill,’ NM insurance official says
  72. Kansas Obamacare enrollment dwarfed by nearly 20,000 cancellations
  73. Numbers don’t lie: In Illinois, Obamacare means Medicaid
  74. Wisconsin governor proposes insurance plan to address Obamacare rollout failure
  75. Tennesseans might know Tuesday if they can keep canceled health insurance
  76. People demand answers over Oregon’s Obamacare fail
  77. Calif. says ‘no’ to Obamacare freebies, makes own law
  78. HI health exchange violates federal law, League of Women Voters say
  79. Obamacare video winner: ‘Forget about the price tag’
  80. Harvard study finds ‘striking’ rejection of Obamacare by young Americans
  81. HI health exchange has signed up 574 people, for about $348,000 apiece
  82. Are the uninsured getting Obamacare coverage in Illinois?
  83. Secret Obamacare handbook the feds don’t want you to see is online
  84. Lost in translation: Once-supportive Hispanics turning backs on Obama, ACA
  85. HI Obamacare exchange not fiscally sustainable, lawmakers told
  86. Illinois’ latest Obamacare targets: gold diggers and momma’s boys
  87. Now Democrats are bashing California’s Obamacare exchange, too
  88. Obamacare: For $1.37M we get Richard Simmons in lurid web stream
  89. Obamacare: A welcome mat for IRS horrors
  90. California senator seeks audit of state Obamacare exchange
  91. Report: Hawaii ranks worst for Obamacare signups
  92. CA senator sues Obamacare exchange for causing policy cancellations of 1M
  93. Failure of Maryland Obamacare exchange could mean higher premiums in North Dakota
  94. Video: Watch Creepy Uncle Sam make it rain
  95. Five bright spots surrounding the Obamacare exchange failures

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Tori Richards is a Pulitzer Prize-nominated reporter who has covered some of the biggest news in the world during her 25 years in the business. She has also won a dozen national and local writing awards for her coverage of the judicial system. Richards has worked for CBS News, Bloomberg, Reuters. Agence-France Presse, the NY Post, the NY Times and The Daily among others. Her work has also appeared on CNN.com, FoxNews.com and US News & World Report. Some of her biggest stories included the cases of OJ Simpson, Michael Jackson, the Aryan Brotherhood and the Night Stalker.