December 4, 2023

Health Insurance

Follow Your Health Insurance

CalOptima, O.C.’s largest health insurer, seeks to offer Covered California plan

An end date for the federal COVID-19 public health emergency may be uncertain, but an unwinding influx of newly uninsured patients in California is assured to accompany its eventual expiration.

For the first time in years, states will undergo redetermination once the declaration ends, a process in California that will assess the eligibility of some 14 million people who currently benefit from Medi-Cal.

“What happens to those individuals?” asked Michael Hunn, CalOptima’s chief executive officer. “Their only option, if they don’t have employer sponsored insurance, is to go to the exchange based on their income and find an insurance plan that they’re eligible for, including the subsidy that goes with it.”

Hunn said the state estimates that as many as 20% of Medi-Cal patients could be rendered ineligible after redetermination.

Looking ahead, CalOptima, the single largest health insurer in Orange County, is advocating to be on that exchange with a Covered California plan ready to address the coming fallout.

Though the Biden administration recently extended the public health emergency declaration for three more months amid a summer surge, CalOptima, which administers health insurance programs for the county’s low-income residents and people with disabilities, hopes to strengthen its future safety net for formerly eligible Medi-Cal recipients to come.

“Our goal here is to create that continuity of care for our members who are going to lose eligibility with redetermination,” Hunn said. “This is not our intent to go out and create a competitive environment with the commercial market. We’re looking at taking care of our members.”

CalOptima, the largest County Organized Health System in the state, currently serves more than 911,000 members. Redetermination is expected to affect at least tens of thousands of them.

In May, CalOptima Board of Directors authorized Hunn to seek a change to county law that otherwise prohibits the health authority from offering insurance directly to patients on the commercial healthcare market.

The Orange County Board of Supervisors approved the first reading of such an amendment on May 24; supervisors are set to consider it again on Aug. 9 for final approval.

“This is the right thing to do for our community and our members who are the most vulnerable living below the federal poverty level,” Hunn said. “There’s a compelling community need for us to seek support for Covered California for CalOptima.”

Private insurance companies already offer six Covered California plans in O.C; CalOptima’s would be the first public agency to do so.

Dr. Toan Tran, chief executive officer of the Family Choice Health Network, supports the move as the organization contracts with CalOptima and serves about 50,000 of its members.

“The problem that we have right now is that many of our Medi-Cal expansion members lose their CalOptima coverage, and they have to go out shopping for health plans,” Tran said. “Most of the time, they go back to their primary care physician for recommendations. If CalOptima is on the exchange, that will make it easier for us to help a patient navigate the process.”

Hunn expects only a modest expansion of staffing to meet the needs of offering Covered California to former Medi-Cal members.

“At CalOptima, we already have a full health plan infrastructure,” he said. “The only additional department that we would add would be a premium collections group.”

Hunn sees the agency as uniquely positioned to help former Medi-Cal patients, especially non-English speakers, navigate an often confusing enrollment process.

Supervisor Andrew Do is also CalOptima’s chairman.

He sees amending the ordinance as a “big step” toward realizing a strategic five-year vision for the agency.

“Medi-Cal members have had continuous coverage for more than two years due to the extension of the Public Health Emergency,” Do said. “However, once it ends, an estimated 50,000 to 70,000 Orange County residents will lose Medi-Cal eligibility and seek a Covered California plan. Having CalOptima in the pool of Covered California plans would provide seamless continuity between the original Medi-Cal plans and the CalOptima plan.”

If approved by supervisors in August, CalOptima’s goal is to have a Covered California plan ready to be offered to former Medi-Cal patients by January 2024.

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