Kaiser Permanente, in No-Bid Deal, Will Take Members From California MCOs

July 15

California elected officials approved a controversial plan that will enroll members of Medi-Cal, the state’s Medicaid program, in Kaiser Permanente’s MCO — shifting those same enrollees off the books of the insurers that currently claim them as members. That’s despite the vociferous objections of 16 county-run MCO plans, which stand to lose hundreds of thousands of members in the transfer to Kaiser Permanente, according to the CEO of the largest plan involved.

Kaiser Permanente did not have to participate in the normal Medi-Cal MCO bidding process to strike the deal. Instead, the integrated health system and insurer, which is based in Oakland, worked directly with the office of Democratic Gov. Gavin Newsom to develop a bill, Assembly Bill No. 2724 (A.B. 2724), authorizing the no-bid contract. State legislators approved the bill on June 29, with the lower chamber, the Assembly, voting 48-15 in favor and the Senate approving the deal 25-7.

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Health Plan Weekly

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.