The experience of Covered California has left a sour taste with consumers.
It was in February 2013 that I wrote a glowing post about the imminent launch of the Covered California website. Thousands of individuals and families across California were full of hope and optimism as Covered California looked to be on track to fulfill the long awaited promise of access to health insurance under the Affordable Care Act. Two years later, many liberals, including me, have been soured on the implementation of the ACA under Covered California.
Is Obamacare evil?
Before all the conservatives jump up and yell, “I TOLD YOU SO, OBAMACARE IS EVIL”, the dissatisfaction many Californians are experiencing is not with the health care system but the bureaucracy. Aside from the narrow provider networks imposed by the health insurance companies within the new individual and family plans, the health plans are operating as they should. I’ve had numerous clients that bought a health plan through Covered California and the next month they were in the hospital getting a long delayed surgery. The health plan members paid their deductibles, copayments and coinsurance and the health insurance paid the claims according to their Evidence of Coverage for the plan.
The process is broken, not the product
It’s not that Obamacare broke the product of health insurance; it’s that the process of getting affordable health insurance is flawed. It all started with a not-ready-for-prime-time Covered California enrollment website and understaffed customer service center. To a large extent the website meltdowns and two hour long wait times on hold to talk to a service center staffer can be forgiven. The launch of an ambitious program such as Covered California and the ACA was bound to have hiccups and glitches. While many of those early software and training issues have been resolved, people are still struggling under the weight of multiple bureaucracies that don’t seem to talk to one another.
Health care bureaucracy supreme
The four bureaucracies that are giving pause to many supporters of health care reform under the ACA are Covered California, Medi-Cal, health insurance companies and, now that tax season has rolled around, the IRS. All four of these multi-faceted organizations are intertwined to the point where they make the Department of Motor Vehicles look like a well-oiled customer service machine.
Why are my children on Medi-Cal?
A valid criticism of the ACA was the mushrooming of the bureaucracies that individuals and families, without group health insurance, would have to navigate just to secure affordable health insurance. For the middle class liberals who ostensibly were eligible to receive tax credits, the Medicaid system was something other people had to deal with. The first shock for many families was learning that their children would be put into the Medi-Cal system because their Modified Adjusted Gross Income (MAGI) was below 266% of the federal poverty line (FPL).
MAGI with no gifts
Covered California didn’t make the rule regarding the income thresholds for Medi-Cal eligibility. But they didn’t help the situation with a confusing income section on their application, lack of information on what constituted the MAGI, or proper notification that Medi-Cal was a real possibility for the children of many families. The end result was that many households attempted to by-pass the Medi-Cal designation by inflating their incomes or indicating they didn’t want help paying for health insurance at the beginning of the application. Families who indicated they didn’t want help when they applied through Covered California are now finding they have been locked out of receiving the ACA premium tax credit on their federal taxes because Covered California is not generating Form 1095-A for them.
You are only eligible for the tax credits if you purchase a health plan through a Marketplace exchange. Covered California should have told people up front that if they opted out of receiving help to pay for health insurance, they were opting out of receiving any tax credits when they filed their taxes. However, it can be argued that those individuals and families did purchase a Qualified Health Plan through the Marketplace and should be eligible for the tax credits. We’ll see if Covered California can resolve this tax credit/enrollment issue.
The locked Medi-Cal door
Covered California was big on marketing the “No Wrong Door” approach where, regardless person’s financial situation, they would secure either a private plan with tax credits or low cost Medi-Cal. What Covered California failed to tell people was that once they went through the Medi-Cal door it was locked. Even though Covered California handed off the Medi-Cal applications to the respective counties where the applicants lived, there was very little information from Covered California on how Medi-Cal even operated. It wouldn’t be until July of 2014 before Covered California even produced any information to help people navigate the Medi-Cal system.
Medi-Cal trumps Covered California
What was unknown to most Californians, and possibly to Covered California as well, was how omnipotent the Medi-Cal system is in the health insurance exchange. The primacy of Medi-Cal became apparent when county social services departments were auditing Covered California and busting people into Medi-Cal coverage. Many people found out that there private health insurance was cancelled and they had been knocked down to Medi-Cal only after their doctor notified them their private health insurance was no longer active. The arcane notices sent by Covered California were often ignored because people were receiving several every week, often times with contradicting eligibility information.
Say hello to your Medi-Cal case worker
Medi-Cal is the ultimate bureaucratic nightmare. The counties administering the Medi-Cal enrollments were ill-prepared for the wave of people eligible for the no cost managed care plans. County Medi-Cal social workers can view and tinker with Covered California accounts, but Covered California can’t view the Medi-Cal Statewide Automated Welfare System (SAWS). Consequently, Covered California has little information or leverage to help someone climb out of the Medi-Cal system. If the county Medi-Cal social services worker determines an applicant’s income is not valid, the person is placed into Medi-Cal, with, according to Covered California, a ten day window to correct the income information.
Really, I’m self-employed
Once the window closes, people have to wrestle with an elusive county social services case worker to correct the situation. Individuals and families have to spend hours on the phone trying to get a hold of their social worker to find out why their income was denied for the tax credits. The Medi-Cal system is putting a lock on Covered California accounts so people can’t make adjustments to get back into a private plan. Stable middle class families, who thought social workers were only for the less fortunate, now find themselves pleading their household income cases to a person who has no clue about what it means to be self-employed.
Carriers take orders from Covered California
The obstinacy of Medi-Cal is mirrored in the relationship between Covered California and the health plans. The health insurance carriers can make no changes to the member’s account unless it comes from Covered California. If a health plan member needs to make a change to an address or telephone number the change must be made in the Covered California CalHEERS program. The change is then sent to the carrier so they can update the information. But if Covered California gets the data feed of information wrong or never sends it, then the change never happens.
Covered California finger pointing
Consumers have spent hours on the phone trying to make simple corrections and sorting out nasty billing nightmares. Invariably the health plan tells the member to call Covered California because they got the wrong information. Covered California tells the consumer to call the health plan because they sent the right information. Within the absurdity of this finger pointing, individuals and families begin to feel like human Ping-Pong balls. Fortunately all new ACA health plans include coverage for mental health treatment.
Who wants an IRS audit?
If the bureaucratic hassles with Covered California, Medi-Cal and the health plans weren’t overwhelming enough, consumers now have to deal with the IRS and incorrect tax credit statements issued by Covered California. Of course, some households have learned that a 1095-A was never generated because Covered California withdrew one of their applications during 2014. People just don’t want to screw around with the IRS by filing an incomplete return or filing an amended tax return. It’s better to get a diagnosis that you have a horrible disease than get a letter from the IRS informing you you’re being audited.
I didn’t sign up for this
My assessment that liberals have soured on health care reform at the hands of Covered California is documented by the numerous emails, comments and phone calls I’ve received. The common refrain from consumers in our conversations was, “I didn’t sign up for this”. We all wanted an overhaul to the health insurance system that was rigged by the large campaign donations from the insurance, doctor and hospital lobbies. But it was never expected that so many people would be placed into a bureaucratic prison simply by trying to obtain affordable health insurance.
A hornet’s nest of rules and regs
The first step to reforming the system is for Covered California to become less of a sales organization and more of a consumer advocate. The rules governing a household’s income, eligibility for tax credits, and when family members are placed into Medi-Cal are confusing and complicated. The connection and linkages between Covered California, Medi-Cal, health plans and the IRS are similarly complex. All this information, rules, and regulations swirl around the consumer like a dust devil filled with detritus.
Where’s the consumer advocate at Covered California?
Instead of giving vague responses to consumer questions or passing the buck with statements like, “You’ll need to call your county social worker”, Covered California needs to work with the consumer to correct the issues. The familiar refrain at Covered California Board meetings when faced with consumer enrollment nightmares is that they are a learning organization. While that may be true, that doesn’t prevent them from taking bold actions to educate consumers and advocate on their behalf.
The sour taste of health care reform
We all understand that Covered California has their hands full managing outreach to underserved populations in the state and furiously working to generate corrected 1095-A statements. But many middle class families feel like they are being ignored as they try to resolve issues concerning Medi-Cal, health plan billing problems, and now the mysteries of reporting their advance premium tax credits to the IRS. Until Covered California can begin to support these middle class families in a meaningful way, many Californians will continue to experience a sour taste associated with health care reform.