Exchange's lack of transparency ruffles legislative feathers

June 11, 2013

Since its inception in 2010, California’s health benefit exchange, now known as Covered California, has largely been allowed to operate outside of California’s public record laws, exemptions which members of the Associated Press found to be entirely unique to Golden State and potentially at odds with protections built in to the state constitution.

Now, a pair of state senators are trying to scrap these special secrecy protections, and ensure that Covered California begins to operate inside the state’s public records laws and make public its plans to spend almost $458 million on outside vendors by the end of 2014.

The bill, SB 332, would scrap protections afforded to Covered California through legislation passed in 2010 that made California the first state in the nation to establish an exchange following the passage of the Affordable Care Act. Under that legislation, Covered California could keep all contracts private for a year and the amounts paid secret indefinitely. Additionally, meeting minutes and records that dealt with staff recommendations and potential board actions were not subject to California’s public record laws.

If SB 332 is passed, these secrecy provisions would be reversed, and Covered California would be forced to operate under more limited exemptions, like the ones offered to state health programs such as Healthy Families. These exemptions, lawmakers say, are designed to promote fair competition and are limited to contracting with large health plans. Under the proposed bill, these contracts would be open to inspection –at any time – by the Joint Legislative Audit Committee.

All non-exempt contracts, as well as the general activities of the Covered California board, would be subject to California’s public record laws.

The California Medical Association supports the bill and hopes that greater transparency can also be brought to the contracting of physicians by health plans participating in Covered California.


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