Covered California’s leader champions health care access
In the 1980s, Peter Lee headed for the front lines of the HIV/AIDS crisis. In Washington, D.C., the Pasadena native helped organize rallies in front of the White House to protest the Reagan administration’s tepid response to the epidemic.
It was his first job in health care, and 30 years later, the lessons still resonate as he heads the enormous insurance marketplace known as Covered California.
“I was a young gay man seeing people my age dying,” he recalled. “That was such an immediate thing. And it was issues of insurance companies denying coverage to people because they tested for HIV. Or because they were gay and they might test for HIV.”
Lee now stands firmly on the other side — crafting policy, rather than waving fists. But he is not your typical bureaucrat, despite running one of the most closely watched government agencies in the nation’s most populous state. Chatty and energetic, he’s been front and center in three statewide bus tours to promote Covered California health insurance signups — grueling weeklong bus drives from San Diego to San Francisco, an operation not unlike a political campaign.
“People tell me stories about access to care,” he said, recalling conversations with Uber drivers and families
with chronically ill children who are able to buy coverage because of financial assistance they receive under the Affordable Care Act — the 2010 federal law that created Covered California and Lee’s job.
Lee, 59, is driven by a desire to make health care more attainable. And by many measures, he is succeeding. Covered California, now in its fifth year, weathered a rocky rollout marred by technical mishaps. It maintains enrollment of about 1.3 million people, more than any other state-run exchange. Most receive subsidies to buy insurance. Covered California has one of the healthiest pools of patients among all state exchanges — an important metric because a smaller proportion of sick people means lower premiums overall. Covered California has managed to keep the state’s largest health insurers on board and selling through its marketplace, while many other states are struggling to get even one insurer to sell in many counties. Yearly premium increases, while sizable, are less dramatic than they are in many states.
“Peter created a wellfunctioning health insurance exchange in California when other states and the federal government struggled to even make it work at all,” said Larry Levitt of the Kaiser Family Foundation, who has known Lee for 20 years. “That would have to be counted as a major success.”
If Covered California is an experiment, Lee is its chief scientist. He’s taken liberties to be a more outspoken defender of the Affordable Care Act than many of his counterparts, even in other blue states. Lee tests the limits of how far a state health exchange can go, some observers say, such as when he pushed to standardize deductibles and co-pays across its health plans. The move, designed to help consumers more easily comparison-shop for plans, is considered “very uncommon in most states,” Levitt said.
Last year, when the GOP-led Senate was considering a bill to repeal the Affordable Care Act, Lee joined 11 other directors of state health exchanges in voicing their “serious concerns” about the proposal. When the Department of Health and Human Services slashed its marketing budget for the federal exchange Healthcare.gov by 90 percent to $10 million, Lee went the opposite direction, pushing to boost Covered California’s marketing spending 5 percent to $111 million. Last month, he urged Health and Human Services Secretary Alex Azar to restore the federal funding, writing in a letter that it “is not too late to act” and that “we at Covered California would be happy to make our creative assets available for use.”
The next few years will be a test for Covered California’s durability in the face of efforts out of Washington to roll back the Affordable Care Act. Starting in 2019, the health law’s requirement to buy insurance, the individual mandate, will no longer exist. Federal regulators are also working to loosen restrictions on the sale of short-term insurance plans, which would make it easier for consumers to buy cheaper plans that cover less. Partly as a result, Covered California expects premiums to rise 11 percent next year and enrollment in the exchange to drop 12 percent.
“Covered California may face its biggest challenge going into next year,” Levitt said.
In California, where state officials pride themselves as leaders of “the resistance,” perhaps no one shoulders as much responsibility for — or can claim as much credit for — the outcome of health insurance markets as Lee.
Former colleagues who’ve worked with or for Lee consistently offer descriptions such as “indefatigable,” “unstoppable” and “passionate.” One recalled hearing Lee, when Covered California was still in startup mode, comparing its creation to that of the Empire State Building.
“He fills the room,” said Gary Cohen, who briefly served as Covered California’s general counsel in 2012 and is now an executive at Blue Shield of California, one of the largest insurers on Covered California. “Every meeting I ever was in with Peter, he commands the stage and has a point of view. You know where he stands and what he wants.”
Even some skeptical of Lee’s aggressive tactics back him publicly, out of solidarity among state health policy regulators and professionals who want the Affordable Care Act to work in California.
Lee is working to minimize next year’s enrollment drop-off by expanding an already-aggressive marketing campaign to caution consumers about the risks of not buying insurance.
“If consumers are left to their own devices, more will take that gamble,” he said. “If consumers are educated and reminded of what insurance is about, fewer will make that bad bet. It’s a bad bet to go without insurance.”
Born in Pasadena, Lee grew up around prominent physicians. His father, Dr. Peter Lee, led the family medicine department at the county hospital at the University of Southern California, and was an early and outspoken champion of Medicare in the 1960s. His stance riled the local medical association enough to prompt calls for his ouster for “promoting the evil socialism of Medicare,” Lee said.
Lee’s uncle, Dr. Philip Lee, was the first health commissioner for San Francisco and helped implement Medicare during President Lyndon B. Johnson’s administration.
A generation earlier, Lee’s grandfather, Dr. Russel Lee, co-founded Palo Alto Medical Foundation and served on a committee assembled by President Harry Truman that recommended a national health insurance program — a revolutionary idea at the time.
“The fruit doesn’t fall far from the tree,” Lee said.
An avid swimmer, Lee has two open-water swims on the books for this year: the annual Alcatraz Sharkfest, a 1½-mile course, and an open-water swim at the Gay Games in Paris. He dotes on his 3-year-old goldendoodle, Gilly, who often accompanies him to work. His office is stocked with La Croix sparkling water.
Lee earns $436,800 a year — more than Gov. Jerry Brown’s $190,000 and many of Lee’s counterparts at other large state health insurance marketplaces such as New York.
Covered California does not work well for everyone, and Lee acknowledges cost is a challenge for many. Consumers who buy insurance on the individual market pay an average of $503 a month in premiums. Some receive federal subsidies to offset the cost, but many pay the full premium on their own. Deductibles for some of the health plans sold through the exchange are several thousand dollars — out of reach for many Californians struggling to balance health costs with other expenses.
While “$500 is a boatload of money,” Lee said, “we believe no deductible between you and your doctor is a good thing.”