Covered California director to step down in February

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Peter Lee

FILE – In this Nov. 13, 2013, file photo, Peter Lee, executive director of Covered California, the state’s health insurance exchange, speaks at a news conference in Sacramento, Calif. On Thursday, Sept. 16, 2021, Lee announced that he will step down from his position in February of 2022. Lee has been Covered California’s only executive director since it was launched in 2012. (AP Photo/Rich Pedroncelli, File)

SACRAMENTO, Calif. (AP) — The director of Covered California said Thursday he will step down early next year, prompting a national search for a new leader of the nation’s largest state-based health insurance marketplace.

Peter Lee has been Covered California’s only executive director in its nine-year history, launching the marketplace in 2012 at a time when the Affordable Care Act was a polarizing force in U.S. politics.

During his tenure, Covered California dramatically expanded the number of people eligible for discounts in their monthly health insurance premiums. A record high 1.6 million people in the state with a population of about 40 million people now buy their health insurance through Covered California. That helped to reduce the state’s uninsured rate to 7.7% in 2019 from 18.5% in 2010, according to the U.S. Census Bureau.

Lee, 62, said the recent deaths of his mother and uncle caused him to pause and reflect on what he wants to do with the next phase of his life. He does not have another job lined up.

“Covered California has been in many ways the beacon of showing how the Affordable Care Act can work,” Lee told The Associated Press in an interview. “The organization is in great shape and I want to look at something new.”

Health insurance marketplaces are a key component of the federal Affordable Care Act, former President Barack Obama’s health care law.

The marketplace is for people who don’t have — or can’t get — health insurance through their jobs and make too much money to qualify for government-funded health care. It was designed to make it easier for those people to get health insurance and offers discounts to some people who make below a certain income level.

Most states chose to let the federal government run their marketplaces for them. But California is one of 15 states that runs its own marketplace. Lee has been the public face of California’s marketplace for the past decade, traveling throughout the state to promote it with the fervor of an evangelist.

He insisted on negotiating with health insurance companies on prices and standardizing benefits across plans so consumers could more easily compare plans when deciding which to purchase.

“He’s willing to negotiate and to say no to insurers that were not providing value and to hold the plans accountable for higher standards on quality and equity,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group. “I think it’s a testament to his work that we’ve had less than a 2% average increase in premiums for the last three years.”

When Republican President Donald Trump was in office, the federal government slashed its marketing budget for the federal marketplace. But Lee spent about $100 million per year — money that comes from small fees assessed on premiums — on marketing in California, including TV and radio ads in multiple languages and paying social media influencers to encourage people to buy health insurance.

“He has definitely made his mark in making the point that health insurance doesn’t necessarily sell itself, that you have to market it like any other product,” said Larry Levitt, executive vice president for health policy with the Kaiser Family Foundation, a nonprofit group focusing on health care issues.

Dr. Mark Ghaly, California’s health and human services secretary and chair of Covered California’s Board of Directors, said the agency will launch a national search for Lee’s replacement.

“Today, Covered California is an indispensable part of our state’s drive toward universal coverage and is in a great position to continue its mission of service and innovation as a state and national leader,” Ghaly said.

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