California senator seeks audit of state Obamacare exchange


By Tori Richards |

A California senator is seeking to audit the state’s Obamacare exchange after a story revealed that $1.37 million was spent on a campaign featuring an eight-hour web stream starring a gyrating Richard Simmons.The Jan. 16 event — now immortalized on YouTube — showed celebrity fitness trainer Simmons writhing on the ground to an MC’s chant of “Get Covered, hashtag, uh-huh,” a reference to Covered California, the state exchange. At one point, he snuggles up to a contortionist following a dance-off.

Covered California faces a $78 million deficit during the next fiscal year due to cutbacks in federal funding.

“What a waste of money — oh, my gosh,” Gaines said in an interview. “I looked at the video and was blown away that they would spend money on that. And for them to think that people would want to sign up for health insurance from seeing it? Give me a break.”

Gaines formally requested the audit Thursday in a letter addressed to the chairman of the Joint Legislative Audit Committee. It was the same committee that recently discovered the exchange’s budget shortfall.

SIGN UP PLEASE: Richard Simmons’ Covered California video is meant to lure new customers.

“Covered California recently spent $1.3 million on a widely mocked infomercial featuring Richard Simmons,” Gaines wrote. “I fear that this is evidence that the Exchange shows little regard for the precarious fiscal condition it faces.”

Gaines, who is vice chairman of the Senate Standing Committee on Insurance, said Covered California doesn’t appear to have a plan to fill in the deficit, and he fears that policy holders will be stuck with a massive rate increase.

“It is stunning to me that a Department this new and this small could be facing a deficit this big without a plan to cover it,” Gaines wrote. “In light of this deficit (and) the seemingly ill-advised informercial … an examination of the Exchange’s finances is in order.”

Several steps have to occur before an audit. The Bureau of State Audits will determine a cost based on the scope of the work; Covered California Director Peter Lee and the general public will have a chance to respond to the proposal; and the committee will decide whether to move forward, table the request, or transfer it to another agency.

A hearing is scheduled for Feb. 11.

Lee could not be reached for comment.

Covered California’s budget is $399.7 million, of which $102.6 is spent on outreach, a legislative report showed. So far, about half a million people have enrolled.

Contact Tori Richards at and on twitter @newswriter2.

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