As a way to help protect individuals and families, with no health insurance, from the health care costs associated the corona virus covid-19 pandemic, the federal government should allow people to buy a Medi-Cal HMO Plan. These plans are much less expensive than private insurance, which means they are much more affordable.
There are thousands of individuals and families who earn too much money to qualify for either MAGI Medi-Cal or the Premium Tax Credit subsidies offered through Covered California. They are left with paying the full rate of health insurance that can easily be $900 to $1,200 per month for a minimal Bronze plan in Northern California. (Based on Anthem Blue Cross rates age band 60 to 64, Region 1.)
In Monterey County, for fiscal year 2017, the capitation rate for a Medi-Cal HMO plan was averaging $450 per month. This data is old, but the Department of Managed Health Care has not posted any more current capitation rates. However, the capitation rates have decreased from when MAGI Medi-Cal was introduced with the Affordable Care Act in 2014. Why are Medi-Cal rates dropping while Covered California rates increase?
California expanded Medi-Cal eligibility in 2014 with higher income limits for qualification (138% of the federal poverty level.) It is known as Modified Adjusted Gross Income (MAGI) Medi-Cal and is based only the household income, not assets. There is still conditional Medi-Cal for people with disabilities and/or 65 years old.
The capitation rate is the same for all adults up to age 65. It doesn’t matter if the enrolled individual is 25 years old or 55 years old, the capitation rate is the same. The capitation rates are the monthly premium paid to either the county based Medi-Cal HMO plan or a private insurance company that offers a Medi-Cal plan such as Anthem Blue Cross Partnership plan. California pays 10% of the cost of the capitation rate and the federal government pays 90%.
Why can’t people who earn too much money to qualify for either MAGI Medi-Cal or the subsidies through Covered California just be allowed to pay the monthly capitation rate for these plans? They are less expensive than private insurance and would offer some protection from the corona virus health care costs.
Some would argue that neither the state nor the counties, who handle individual eligibility and enrollment into Medi-Cal, are equipped to handle such a public option and handling premium payments. But Covered California does have the structure to handle private pay enrollment into Medi-Cal plans.
Covered California already determines who is eligible for MAGI Medi-Cal or a private health plan with the subsidies. When an individual, children, or family are determined eligible for Medi-Cal through the Covered California application, that is information is sent to the county of residence of the applicant for final eligibility determination and enrollment.
Covered California could add another option to their health plan selection process that of Medi-Cal. They just need to add the capitation rates for each of the counties so the individual or family would know how much the cost would be.
Another issue is handling the monthly payments for the Medi-Cal plans. Covered California already has a unit that bills for small group plans and handles payments. They could easily expand this operation to handle the payment of the Medi-Cal capitation rate for individuals who wanted to purchase this public option.
Now all we need are some politicians who can push through this public option, if only for a limited time during the pandemic.
