Attorney General Asked To Investigate Health Insurance Executives Embroiled In No Bid Contract Scandal At Covered California, Industry's So-Called "Independent Commission," Says Consumer Watchdog Campaign


SANTA MONICA, Calif., Oct. 13, 2014 /PRNewswire-USNewswire/ -- In response to the Associated Press's disclosure of unusual no-bid contracts between California's insurance exchange Covered California and well-connected insurance executives, Consumer Watchdog called upon the Attorney General of California to launch an independent investigation of various contracts at the agency with industry insiders.

Read the letter here:

Associated Press reported today that the Covered California "awarded $184 million in contracts without the competitive bidding and oversight that is standard practice across state government, including deals that sent millions of dollars to a firm whose employees have long-standing ties to the agency's executive director."  Read the story here

The Associated Press story focused on $4.2 million in no-bid contracts to Leesa Tori, a former Blue Shield executive who is closely connected professionally to Peter Lee, Covered California's executive director.  Tori's interim role at the agency included negotiating and overseeing contracts with private health insurance plans including Blue Shield. 

Consumer Watchdog called on the Attorney General to investigate contracts with Tori and other private consultants who were hired to shape the agency and those still serving there who have been executives at insurance companies the agency is contracting with.  

Consumer Watchdog released this organizational chart of key Covered California consultants and employees that has been amended with company logos to show insurance industry employment affiliations:

"Californians deserve to know the truth about hundreds of millions of dollars in no-bid contracts and industry influence at Covered California before they vote on November 4th," Consumer Watchdog's president Jamie Court wrote to California Attorney General Kamala Harris. "Four health insurance companies are spending $37 million against Proposition 45's rate regulation, falsely claiming there is an 'independent commission' overseeing health insurance rates. The Associated Press's disclosures confirm that this 'commission,' Covered California, does not operate with the transparency, accountability and independence that voters expect from government agencies and need in order to be protected from health insurance company rip-offs. Voters need the facts about these consultants and contracts, so they can make an informed choice about rate regulation."

Consumer Watchdog called for an investigation of the following contracts with industry consultants and key employees at Covered California:  Ken Wood, the former COO at Blue Shield, who served as Covered California Special Advisor, then returned to Blue Shield to become Senior Vice President; Jeff Rideout, formerly of Blue Shield and other companies, who has a current $410,000 consulting contract, and works in the current division that negotiates and oversees contracts with health insurance companies;  Ann Price, formerly of Blue Shield, who replaced Tori in her role as Plan Management Division Director; John Berkto, chief actuary, formerly employed by Humana; Corky Goodwin, who formerly worked for Health Net; and Kathleen Solario, who worked at Blue Shield and as Interim Operations Director at Covered California.

Consumer Watchdog also noted that Covered California has refused for months to release information requested by Consumer Watchdog under the Public Records Act concerning the agency's communications with insurance industry executives about Prop 45, the measure on the November ballot to require health insurance companies to open their books and justify their rates to the elected Insurance Commissioner, just as auto, home and small business insurers do.

For more on Prop 45 visit:

Paid for by Consumer Watchdog Campaign – Yes on 45, a coalition of consumer advocates, nurses, attorneys, and policyholders.  777 S. Figueroa St., Ste. 4050, Los Angeles, CA  90017.  Major Funding by Consumer Watchdog Campaign and California Nurses Association.

SOURCE Consumer Watchdog Campaign