New Exchange has extraordinary levels of secrecy approved by the federal government

by Brian Leubitz

For the states that are proceeding with the setup of a state-based health insurance exchange, contracts are beginning to go out. Bids are coming from a number of sources, and the states are doing their best to get the best deals. And getting the best deal may require a temporary level of secrecy, but why would California’s need so much more secrecy than any other state? That’s what the federal government granted the state in a recent waiver:

The degree of secrecy afforded Covered California appears unique among states attempting to establish their own health insurance exchanges under President Barack Obama’s signature health law.

An Associated Press review of the 16 other states that have opted for state-run marketplaces shows the California agency was given powers that are the most restrictive in what information is required to be made public.(Michael Blood / AP)

A few other states have explicitly applied their open records’ act to the exchanges, while others have exempted commercial and financial information. But apparently we have gone the extra mile in authorizing the exchange and the exemption from our own open records laws:

In California, the explicit exclusions from open-records laws may run afoul of the state constitution, said Terry Francke, head of Californians Aware, a group that promotes government transparency.

If the Legislature wants to limit access, the state constitution requires it produce findings that demonstrate the need for shielding information from the public. In the bill that authorized the exchange, the Legislature devoted two sentences to address that issue. It argued the cloaked spending was “necessary” to protect “powers and obligations to negotiate on behalf of the public.”

There may be some issues, but in all likelihood this was totally permissible. In fact, closed bids will probably allow the state to produce better value for the system. It would be nice to see some of the data, even if it comes out a few years later. But for now, this AP story has Sacramento buzzing…