A California state lawmaker has filed a lawsuit against Covered California, claiming the state's health insurance marketplace has illegally forced insurers to cancel certain individual health plans.
State Senator Ted Gaines (R-Roseville) — who is running for state insurance commissioner — filed the suit.
It accuses Covered California of violating federal and state laws by requiring insurance companies to cancel individual plans that don’t comply with the standards set forth in the Affordable Care Act.
It then claims that Covered California further violated the law when it opted not to allow the extension of those individual policies last fall, after President Obama told states they could do so.
Gaines filed his suit on the same day that the Obama administration announced that it was giving people with non-compliant individual plans (in those states that went along with the president's original policy change last fall) another two years before they have to get a policy that meets the federal law's standards.
Gaines, who owns an insurance company, also contends that Covered California has squandered more than $100 million in taxpayer money on marketing campaigns that he argues have failed to generate significant or diverse enrollment.
A Covered California spokesman said the agency cannot comment because it has not yet seen the suit.