Exchange Spends More Than Expected on Enrollment, Retention System

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Covered California board members last week voted to adopt a larger-than-expected budget for the 2013-14 fiscal year.

At their board meeting Thursday, board members adopted a $488.6 million budget for the new health insurance exchange, roughly 22% over the original $399.7 budget.

The increase can be attributed to costs borne by other departments for IT-related expenditures, according to Anne Gonzales, public information officer for Covered California.

"The difference is expenditure authority vs. the bottom line budget," Gonzales wrote in an email, and that's primarily "the costs for CalHEERS paid by other departments."

CalHEERS -- the California Healthcare Eligibility, Enrollment and Retention System -- is the computer system and website that helped enroll 1.4 million Californians into the exchange, and another 1.9 million into Medi-Cal from October 2013 to April 2014.

"That increased by $112 million over the original projection," said Yolanda Richardson, chief deputy executive director of Covered California at last week's board meeting. "It's what allowed Covered California to go online on time."

Exchange board member Robert Ross balked a little at the sizable budget increase.

"CalHEERS is a painful one to swallow," Ross said, "because it's so large and significant."

Ross asked Richardson what would happen if the exchange board chose not to increase the budget for the IT costs.

"Well, that's a tough question," Richardson said. "And one we hope we don't have to consider."

Ross summed up the increase: "So it's fair to say, we had an inaugural year, and now we know a lot more and we know what it takes going forward," Ross said.

"We want to focus on the consumer experience," Richardson said, "and to mitigate the concerns people have had about that."


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