Californians to Watch in 2013: Peter Lee will launch California's health exchange

12/28/2012 12:00 AM

01/06/2013 3:00 PM

In a large downtown Sacramento office perched above J Street, empty cubicles and a sense of calm in December belie the nearly impossible task before Peter V. Lee.

In nine months, his Covered California organization will try to sign up hundreds of thousands of residents for health care in a multitude of different languages.

A new statewide computer system – still in development – must determine which state program each family qualifies for, then offer prices based on income and coverage level.

As for that coverage? Over the next six months, Lee's group must negotiate and select different health plans in more than a dozen geographic regions around the state.

"None of this is easy," Lee said, "and we're confident about all of it."

Lee oversees Covered California, the state's linchpin in the national health care overhaul that will head into overdrive in 2014. Under the federal Patient Protection and Affordable Care Act, residents can buy subsidized private health insurance through Covered California, and insurers cannot charge different prices or deny coverage based on prior health conditions. Those who do not have health coverage face an annual penalty.

Lee once led the Pacific Business Group on Health, which leveraged the size of large businesses and government employers to negotiate lower health care premiums. He also oversaw PacAdvantage, a now-defunct insurance pool for small businesses.

Before arriving at Covered California in August 2011, Lee worked for President Barack Obama's administration on encouraging health care innovation in communities across the country.

Lee faces his biggest challenge yet: building a new marketplace for health care whose success – or failure – will help determine how Obama's national overhaul will fare.

"The biggest obstacle will be the clock," said Anthony Wright, executive director of Health Access California. "He has had the right ambition, that it's not just about getting up and running but setting up a framework of what could be transformational for years to come."

Lee listed the numerous hurdles that Covered California faces. A major concern is getting enough healthy people to buy health care, since they have less motivation than sick patients who need immediate help. Covered California, for now fully funded by federal dollars, plans to air ads across the state and offer grants to community groups that can persuade people to sign up.

"We have people with very different experiences with the health care system, people with very different education levels," Lee said. "We have a lot of rural Californians. Our marketing and our outreach needs to be designed recognizing that California is very diverse."

Some business organizations remain concerned, such as the National Federation of Independent Business, the lead plaintiff in the challenge to Obama's health care law. The U.S. Supreme Court in June allowed most of the law to stand.

The group's California executive director, John Kabateck, said his 20,000 members are trying to determine how much coverage will cost and whether it makes more sense to pay a penalty than participate in Covered California's small-business program.

Kabateck says he's trying to meet with Lee to discuss his group's perspective. Despite challenging the Obama law, he sees some potential in Covered California to help control employer health costs.

"One concern going forward is that small-business owners who have less resources will pay a heavy price with this new law," he said. "Our hope with the exchange is that it will give the local bookstore, auto shop, dry cleaner or florist the freedom and flexibility to find a plan that works."

In the next year, Lee expects to fill the rows of empty cubicles in Covered California's new office with financial analysts, auditors and marketing and outreach experts, among others. He acknowledges the timeline is ambitious, such as installing an enrollment system in 18 months that normally would take twice as long. In a state notorious for missing technology deadlines, no less.

"There isn't a fallback to not being open on Oct. 1 and starting to enroll people," Lee said. "So what that means is there isn't an on-off switch."

He will think about triaging needs if the timelines become difficult to meet. If some aspects are ideal but not necessary to enrolling people in October, they can wait.

"Look, we will not be perfect our first year out of the gate," Lee said. "We're going to get better every single year."


Age: 54

Office: Executive director, Covered California

Résumé highlight: Oversees the state agency implementing the federal health care overhaul.

Biggest challenge in 2013: Overcoming language and social barriers to persuade hundreds of thousands of residents to sign up for subsidized health insurance.

Chief goal in 2013: Ensuring that California has a functional health care marketplace that meets the needs of uninsured residents, providers and insurers.


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