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Level 1 Federal Grant Letter to Health Benefit Exchange

June 22, 2011

The Honorable Diana Dooley, Chair
California Health Benefit Exchange

The Honorable Kim Belshe, Chair
Subcommittee on Exchange Grant Application

Pat Powers, Acting Executive Director
California Health Benefit Exchange

Dear Ms. Dooley, Ms. Belshe and Ms. Powers,

Consumers Union, nonprofit publisher of Consumer Reports, writes to express our support for the Board’s application for an Exchange establishment grant. We listened with interest on the June 20th webinar discussing the Exchange Board’s application process for an establishment grant. We appreciate the Board’s consideration of the many comments supporting increased allocation of funding for stakeholder engagement, program integration, consumer assistance, eligibility and enrollment, translation and interpretation, and outreach and education and hope to see a final draft ensuring adequate funding for these Core Area activities.

We write today specifically to urge you to incorporate into the Level I establishment grant additional resources to undertake consumer assistance, stakeholder consultation and outreach and education.

Consumer Assistance: We recognize the consumer assistance program grant under the auspices of DMHC may be extended through late 2012. We support that grant opportunity and the revision to reallocate resources to community-based organizations to provide assistance. In addition to the DMHC grant, we believe that California’s Level I grant allocation for consumer assistance should be increased to include additional resources for consumer assistance to the Exchange (more than 1.4 FTE) to complement and enhance the work of DMHC under their grant.

CCIIO has identified data collected by consumer assistance programs to be a critical source of information for determining whether the Exchange is ready for business by January 1, 2013.[1] CCIIO specifically suggested consumer assistance as an activity that states opt to engage in on an accelerated time frame.[2]

Increased line item funding for consumer assistance will ensure that the Exchange Board has ample resources to provide assistance and collect data on the kinds of health insurance questions and problems consumers are confronted with every day and to document how California is going about resolving the problems.[3] We would urge the Exchange to increase the funding allocated, for example by increasing the number of FTEs from the current 1.4 FTE for consumer assistance to provide integrated data collection and information from the variety of consumer assistance providers throughout the state, including agencies and community-based organizations, much like that envisioned in California’s Assembly Bill 922.

Stakeholder consultation: We appreciate the preliminary efforts of the Exchange to engage stakeholders in the planning and implementation process. We look forward to working with the Exchange Board staff in many of the stakeholder convenings set to take place over the next two to three years. In addition, we urge the Board to increase the stakeholder consultation line item request to build in funds for participation of consumer groups to participate in the planning and implementation process, modeled on the successful consumer participation that has existed within the DMHC for several years and for many more years at the Dept. of Insurance (for property and casualty issues) and the Public Utilities Commission.

Outreach and education: Companies introducing a new product in the marketplace dedicate substantial time and resources to branding, naming, logo design and marketing planning. We certainly heard from Jon Kingsdale that the Connector in Massachusetts recognized that need from day one and built it into its planning. While it may seem early to do so, we think this would be money well spent to ensure that the foundational program design supports the goal of public acceptance, recognition and uptake. We thus urge you to build more dollars into the Level I application for these purposes.

The new system also will need to be understandable and accessible, although embodying some complicated concepts. We commend the Board for incorporating focus group tests with diverse consumers into the establishment grant application. This can be very valuable for testing web site usability and readability of print materials. We believe, however, that the number of staff (1.4 FTEs) and consulting dollars for all outreach and education work ($400k) will not provide sufficient resources to meaningfully develop and test materials to communicate effectively to the public what the Exchange will do for consumers. Consumers Union has undertaken a number of large-scale focus group projects, for example, testing consumer understanding of plan choice disclosures and terms—many of the terms that will be used in the exchange, including actuarial value. The Exchange needs adequate resources to assess consumers’ understanding and to modify approaches to better reach consumers.

We look forward to continuing to work with the Exchange Board and staff to help California establish and implement a successful program that will be ready for consumers on January 1, 2014. Enhanced funding for consumer assistance, stakeholder consultation, and outreach and education at this early stage of funding will ensure that the investment and time of all of us in California will be successful.


Betsy Imholz
Special Projects Director

[1]“Building sufficient capacity for providing assistance to State residents is a core activity of Exchange planning and establishment. For these reasons, a State must ensure robust capacity for providing such assistance for all of its residents and must ensure that the Exchange reinforces and strengthens this assistance capacity.” Cooperative Agreement to Support Establishment of State-Operated Health Insurance Exchanges. US Department of Health and Human Services and Office of Consumer Information and Insurance Oversight. January 20, 2011, page 11.

[2]Cooperative Agreement, page 9. “…creation of an informational website geared toward consumers, establishment and strengthening of assistance provided to individuals and small businesses, including establishment of an Exchange call center or hotline, identification of possible organizations who could serve as Navigators, and public education and outreach to inform consumers about access to health insurance through the Exchange.” [Emphasis added].

[3]Cooperative Agreement, page 48.