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Now Democrats are bashing California’s Obamacare exchange, too

By   /   February 13, 2014  /   No Comments

Part 87 of 96 in the series Obamacare

By Tori Richards | Watchdog.org

GET COVERED: California's multi-million dollar campaign featured a Richard Simmons dance-off

GET COVERED: California’s multi-million dollar campaign featured a Richard Simmons dance-off

California’s Obamacare exchange, already criticized by Republicans for its finances and the odd “Tell a Friend, Get Covered” campaign, is now taking friendly fire from Democrats.

State Sen. Ted Gaines, a Republican and vice chairman of the Senate Standing Committee on Insurance, said the agency will be $78 million in the red during the next fiscal year. He said he was incensed to learn that Covered California spent $1.37 million on an advertising campaign featuring a lurid Richard Simmons web stream that is now on YouTube, and he has requested an audit.

And now late Monday, Democratic Sen. Norma J. Torres introduced a bill aimed at fixing “problems experienced by consumers” – lackluster customer service, a low Latino sign-up rate and inaccuracies in the provider directory, a news release stated.

“Accountability starts at the top,” Torres tweeted Tuesday. “Covered CA customers deserve better.”

To remedy the situation, Torres’ bill increases the number of Covered California directors from five to seven and broadens the types of expertise for board eligibility to include marketing and information technology. It has bipartisan support.

Torres’ spokesperson, Alex Barrios, said in an interview that Covered California’s poor performance “is the responsibility of the board.”

The agency says it is in great financial shape and even received high marks in an audit conducted last year.

“By 2015-16, we project a reserve of over $184 million,” Covered California spokesperson Anne Gonzales told Watchdog. “We are putting aside a healthy amount of federal grant money and plan to draw on our reserves until our enrollment starts generating income.”

Indeed, Covered California is doing a stellar job – on paper. In two audits:

  • The state of California, which labeled it a high-risk entity, praised its transparency and marketing plans as “more than adequate” and “logical and deliberate.”
  • A self-review submitted to the state Department of Finance on Dec. 30 says it has “adopted and operates with adequate system of internal control and…monitoring processes” with on-going reviews and personnel tasked with ferreting out waste, fraud and abuse.

A federal compliance audit is scheduled for completion in a few months.

Ted Gaines

Ted Gaines

Covered California’s current budget is $399.7 million. Since 2010, the federal government has awarded California $910 million in grants, with no more cash coming in after January 2015. The agency has been saving money for reserves, which will fund its budget after the grants end. Unlike other state agencies, it is prohibited from drawing on the state’s general fund.

In the 2015-16 fiscal year, the deficit will be $78.4 million, decreasing to $34.5 million in 2016-17. The deficit should shrink in succeeding years as more people are signed up in the system, Covered California says.

“We are a startup enterprise, and it would not be fiscally conservative to imagine we will make money as soon as we open our doors,” Gonzales said. “We are being frugal, setting aside reserves until our revenues ramp up. In addition, Covered California is currently helping the state’s fiscal situation. We are operating exclusively with federal funds, and many of those dollars go to create jobs for people who buy goods and pay taxes. We are an economic engine in that respect.”

This doesn’t mollify Gaines, who wants to know more.

He drafted a letter to Covered California Director Peter Lee inquiring about the marketing campaign featuring Richard Simmons but didn’t receive a response until after Watchdog.org’s story appeared.

“From our early data, Tell a Friend – Get Covered has been a success and has surpassed expectations,” Lee wrote. “(W)e have measured a reach of over 202 million impressions throughout the campaign; a significant milestone amplified by over 60 media personalities who … have encouraged their own followers to learn more.”

The eight-hour web stream that featured Simmons also included spots by actress Olivia Wilde and comic Billy Eichner. Other celebrities blogged or tweeted for the campaign, including President Obama, Adam Levine, Fran Drescher, George Lopez, Lisa Leslie and Kerry Washington.

Gaines said in an interview that Lee’s letter didn’t give specific details about how many people signed up during the campaign and a breakdown of dollars spent.

“They have these high-priced consultants for all this so-called great marketing advice,” Gaines said. “The millenials are not signing up at the rate that they should be and there are problems with the Latino outreach. I’m not convinced that the financial structure is going to bring us to the point of break even or profitability.

“I would like to ask these probing questions and have someone provide an account of how dollars are being spent,” Gaines said.

However, the state audit said Covered California’s “outreach plans appear more than adequate” and it “appears to have engaged in a logical and deliberate process when developing its marketing plan.”

Torres also asked Covered California for an accountability on how dollars were being spent and details about its Latino enrollment.

“We didn’t get specific answers,” said Barrios, Torres’ spokesperson. “We believe in accountability. We asked in mid-December for this.”

Covered California’s director, Lee, was invited to speak before the Latino Legislative Caucus and he provided some answers to questions but not all of them, Barrios said.

“As a Democrat, Norma Torres wants to see Covered California do better,” Barrios said.

This story first appeared in CalWatchdog.com

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

Part of 96 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
  96. Obamacare architect admitted in 2012 states without exchanges lose subsidies

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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.