California health insurance exchange nabs $674-million federal grant

Federal officials awarded California’s new health insurance exchange a $674-million grant, providing money for a crucial marketing campaign aimed at reaching millions of uninsured.

The two-year grant announced Thursday comes as the five-member board of the exchange, called Covered California, meets in Los Angeles to discuss its plans for marketing, outreach and contracting with health insurance company bidders. This federal money is designed to help fund the exchange through January 2015, when the online marketplace will begin to rely only on fees assessed on exchange policies.

“The funding is substantial, but given the scale of what we’re doing we have a big job to do,” said Peter Lee, the exchange’s executive director.

Under the federal healthcare law, the state-run exchange aims to fundamentally reshape the health insurance market by negotiating with insurers for the best rates and assisting consumers in choosing a plan.

The exchange also has the task of helping millions of Californians determine whether they qualify for an expansion of Medi-Cal, the state’s Medicaid program for the poor, or federally subsidized private coverage.

Lee said the exchange planned to embark on a major marketing campaign later this year featuring TV, radio and other advertising in advance of enrollment starting in October.

But Lee added that another key component will be grants to religious and nonprofit groups and other community organizations to inform people about their new options for coverage.

“People don’t want to hear from celebrities,” Lee said. “They want to hear from their family and friends.”

The state expects to enroll about 2 million additional residents in Medi-Cal and sign up another 2 million for subsidized private insurance.

Next week, health insurers and other companies must submit their initial bids to sell coverage in the exchange. They will provide details on their networks of medical providers and rates later on.

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