Consumer Watchdog Calls for Investigation of Covered California’s No-Bid Contracts

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The group backing a health insurance rate-control measure on next month’s ballot called on Attorney General Kamala Harris on Monday to investigate millions of dollars in no-bid contracts by Covered California and reported links between the health exchange’s executives and and the insurance industry.

The demand by Consumer Watchdog, a main supporter of Proposition 45, came after The Associated Press reported that Covered California had awarded $184 million in contracts without competitive bidding. The total included millions of dollars in contracts to firms or people that had professional ties to Covered California executive director Peter Lee, according to the report.

The Associated Press reported that $4.2 million in contracts went to The Tori Group, a consulting firm whose founder had once worked with Lee. Other contracts went to the subsidiary of a firm Lee once led, according to the report.

“This isn’t about speed. This is about being opaque,” said Consumer Watchdog president Jamie Court, rejecting Covered California’s claim that it needed uncompetitive contracts to meet the tight deadlines to carry out the state version of the federal Affordable Care Act. “For $4.2 million to flow to a former associate without any oversight is the antithesis of open government and good government.”

In addition, the AP reported that Leesa Tori and eight others listed on the group’s website are contracted to work at the exchange. Court said the report shows the need for Proposition 45, the November measure backed by Consumer Watchdog and Insurance Commissioner Dave Jones that would give the insurance commissioner’s office veto power over proposed rates for individual and small-group health insurance.

Covered California stopped short of taking an official position on Proposition 45, but its board members have voiced strong opposition, saying it would have a detrimental impact on the exchange’s ability to negotiate rates with insurance companies.

Harris’ office was not immediately available for comment about Court’s demand for an inquiry.

Through Sunday, yes-on-Proposition 45 campaign committees had raised about $2.6 million since January 2013. But opponents, led by Kaiser Foundation Health Plan, Blue Shield of California, and Health Net, Inc., had reported almost $30 million in donations during that time.

Call Jim Miller, Bee Capitol Bureau, (916) 326-5521. Follow him on Twitter @jimmiller2.

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