Question: What happens when the federal grant money runs out? Will the California taxpayers have to foot the bill?
Answer: Covered California is supposed to eventually be self-sufficient without state or federal money. Executive Director, Peter Lee, said “The feds are basically saying, ‘We will help you start up, we will prime the pump. But the federal money runs out at some point. ” Covered California’s plan includes an assessment fee of about 3% of premiums in the early years. Eventually, Lee said, the exchange hopes to operate on a 2% premium assessment fee. But if enrollment numbers do not meet expectations, the assessment fee in the second year (2015) would bump up to 5%, then down to 4% in both 2016 and 2017. The premium assessment is to be paid by insurers, which they will recover from consumers in the form of higher premiums.