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Audit: Covered California Remains "High-Risk"

  
California’s state-run health insurance marketplace continues to be rated “high-risk” by the state auditor.

A new audit released Tuesday expresses uncertainties about the sustainability of Covered California.

USC health care finance professor Glenn Melnick says the concerns it identifies have existed since the launch of the state marketplace.

"The troubling news in this report is not surprising," Melnick says. "It’s a start-up business that had a tremendous amount of subsidies from the federal government, and now those subsidies are going to run out."

Federal funding will expire this year. That will leave Covered California to rely solely on revenue from health insurers. The amount they pay is dependent on how many people enroll in insurance plans through Covered California.

The audit says, with limited data from the program's short history, it's hard to know if Covered California's enrollment projections will be correct.

"Yeah, it’s certainly the case. There isn’t a lot of data," Covered California's Roy Kenned says."

But he also says the program has a reserve for just that reason.

"We’re certainly sustainable. And we think we’ll be sustainable in the future."

Kennedy says Covered California has 425,000 enrollees so far this year, already at the high-end of estimates.