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Should unemployed professionals avoid Medi-Cal?

Kevin Knauss
Medi-Cal is a great back stop to crippling E.R. costs.

Medi-Cal is a great back stop to crippling E.R. costs.

There has been a strong reluctance among unemployed professionals to enroll in the ACA’s expanded Medicaid or Medi-Cal programs. For most people, being a Medi-Cal member just has a stigma they would rather avoid. However, in certain situations, Medi-Cal can be a great solution to avoiding the high premiums of COBRA while letting the professional focus on getting the next job or launching their business start-up.

Unemployed professionals avoid Medi-Cal

The situation that is most often presented to me is the middle-aged professional that finds his or herself unemployed and facing high COBRA premiums that are sucking the life out of their savings account. Even switching to an off-exchange private plan can be as expensive as COBRA. Another scenario is that the unemployment benefits have ended and they don’t have enough income to qualify for the tax credits under the ACA to purchase an affordable private plan. In either scenario they qualify for Medi-Cal but have avoided enrolling.

No monthly income equals Medi-Cal eligible

Under the ACA rules, if the monthly household income is below 138% of the federal poverty line, regardless of how much was earned in previous months, the individual or family is automatically eligible for Medi-Cal and ineligible for the tax credits to lower the monthly health insurance premium of a private plan. Children are deemed eligible for Medi-Cal if the household income is under 266% of the federal poverty line while the adults will receive tax credits to purchase a private plan.

Medi-Cal can be tricky

There are a lot of short comings to Medi-Cal. The network of providers in most Medi-Cal plans is very limited and can be heavy with neighborhood clinics. Specialists are even harder to find in the Medi-Cal networks. It can be daunting task to get an appointment with a Medi-Cal primary care physician let alone a specialist. There can also be an extraordinary amount of bureaucracy induced headaches associated with Medicaid programs. For a person or family member with chronic health challenges, Medi-Cal can seem like a death sentence.

Medi-Cal can be a great backstop

However, for the relatively healthy person and families that rarely visit a doctor’s office, Medi-Cal has some distinct advantages as a bridge over a washed out portion on the road of life. Medi-Cal is a great backstop to crippling emergency room expenses if you don’t have any health insurance. Plus, Medi-Cal meets minimum essential coverage that shields the family from having to pay the individual mandate penalty also known as the Shared Responsibility Payment.

While benefits may vary by plan and county, generally Medi-Cal has-

Medi-Cal allows the professional to focus, save money

The prospect of either being unemployed and looking for work or focusing all your energy on starting a new business leaves little room for the stress having high volumes of cash flowing out to cover health insurance premiums. Medi-Cal can be that temporary low to no cost health insurance that allows professionals in transition to put all their energy into their next project. And in the event that some catastrophic accident occurs, Medi-Cal covers the emergency room costs and follow-up office visits.

Private health insurance and Medi-Cal

This is not to say that some members of the household will want to forego a private health plan that includes their doctors. There is no rule stating that you can’t purchase and off-exchange health plan for one or all of the household members if the family only qualifies for Medi-Cal through a Marketplace exchange like Covered California. For example, your daughter needs to see a specialist every couple months for a chronic health challenge but the rest of the family members are super healthy. You can purchase an off-exchange health plan for your daughter that includes her physicians while the remaining household members are covered by Medi-Cal.

Medi-Cal can be temporary bridge

One of the reasons for the expanded Medi-Cal program under the ACA was to bridge the private health insurance gap when an individual or family is in transition between jobs. Medi-Cal isn’t for everyone. But it should be given a careful inspection to see if it will meet the needs of the family until the income levels increase that will trigger the tax credits or when group insurance is offered with a new job.

Covered California Medi-Cal comprehensive guide

Covered California in coordination with the Department of HealthCare Services has produced a comprehensive guide to Medi-Cal and how it works. The Medi-Cal Eligibility, Benefits and Options Advance Study Course provides high level details regarding the often times mysterious workings of Medi-Cal. For more detail on the items outlined below, download the guide at the end of the post.

There are many different programs under the Medi-Cal umbrella and most all of them are administered by each county within California.

MAGI versus Non-MAGI

There are two broad groups of Medi-Cal programs: MAGI and Non-MAGI programs. MAGI based programs are available to individuals and families based solely on their Modified Adjusted Gross Income (MAGI) as determined through Covered California enrollment. Non-MAGI based Medi-Cal programs and assistance considers the assets of the individual or family. Non-MAGI based Medi-Cal is most often associated with assistance for people in skilled nursing facilities. Estate recovery rules apply to both types of Medi-Cal for individuals over 55 years of age.

Full and Restricted Medi-Cal Benefits

Full Scope benefits include coverage for all the essential health benefits of a private plan plus dental, mental health services, pharmacy, vision and drug and alcohol treatment coverage. There is also coverage for durable medical equipment such as wheelchairs, hearing aids, occupational therapy and chiropractic services.

Restricted Scope benefits are usually confined to emergency and prenatal care services. The type of restricted or limited services will vary by the program.

Applying for Medi-Cal

Covered California only determines the eligibility for MAGI based Medi-Cal programs. Eligibility and coverage will start the first day of the month of the individual’s application. Applications for Non-MAGI based Medi-Cal should be made through the individual’s respective county social services office. Residents of San Francisco, San Mateo and Santa Clara counties will get a higher FPL income percentage making more children eligible for Medi-Cal kids. Families in these counties who think they qualify with the higher incomes should contact their local county social services department. Medi-Cal enrollment is open year round.

Medi-Cal Household

Different rules apply for determining a Covered California household or a Medi-Cal household. The Medi-Cal rules are more lenient. A pregnant woman is counted as two individuals under Medi-Cal but only one under Covered California. There are also other rules concerning adult dependents such as a mother-in-law living with her son or daughter. The guide covers many of these complicated relationships but it is always best to contact your local county social services department for definitive clarification.

Optional Targeted Low-Income Children’s program

The Optional Targeted Low-Income Children’s Program (OTLICP) offers healthcare coverage for children previously in the Healthy Families Program (HFP) that were transition into Medi-Cal. OTLICP provides full-scope Medi-Cal benefits at no- or low-cost to children with eligible immigration status and household income up to 266% of the FPL.

Cost is based on the family’s household income. Children are eligible at no cost with an income limit at or below 160% of the FPL. Families with incomes greater than 160% of the FPL will be subject to a health insurance premium of:

MAGI Medi-Cal for Pregnant Women

Medi-Cal Access Program, formerly Access for Infants and Mothers (AIM), includes infants whose mother’s income is above 266% up to and including 322% FPL. These infants are registered into the DHCS Medi-Cal Access Infant Program back to their date of birth once registered by the mother, plan, provider, or hospital. The infant is eligible for up to two years of coverage through the Medi-Cal Access Infant Program as long as the family income stays within the Medi-Cal Access Program’s income eligibility levels at the one year renewal.

Pregnant women qualify for MAGI Medi-Cal up to 213% of the FPL with different coverage levels. Pregnant women with income:

Residency and Citizenship

Medi-Cal requires that individuals and families verify that they reside in the county in which they will receive Medi-Cal benefits. The guide also details the various types of immigration statuses and documentation to be determined eligible for Medi-Cal if the individual or family are not citizens of the U.S.

Medi-Cal Share of Cost

Share of Cost (SOC) means that the individual will have to pay a portion of their medical expenses out-of-pocket. In some instances, Medi-Cal beneficiaries must pay a fixed monthly dollar amount toward their medical expenses before they qualify for Medi-Cal benefits. A Medi-Cal beneficiary’s SOC is similar to a private insurance plan’s out-of-pocket deductible.

The SOC amount is calculated by the County Social Services office using the beneficiary‘s household monthly income and the Medi-Cal Maintenance Need Income Level (MNIL), which is a calculated amount that is needed monthly to pay for living expenses.

SOC Medi-Cal does not qualify as minimum essential coverage. Therefore, beneficiaries can request that their local County Social Services office review their case for MAGI Medi-Cal eligibility.

Medi-Cal Managed Care

While some Medi-Cal beneficiaries will be in Fee-For-Service plans where they may have to pay a share of cost (SOC), most individuals will select a manage care or HMO plan for their benefits. Medi-Cal HMO plans are either non-profit plans run by the county or a private plan that has contracted with the county to provide Medi-Cal full scope benefits. Each county may have different plans available to the Medi-Cal beneficiaries. Some counties may have only one plan. In almost all instances, the individual or family will have to select a managed care plan or one will be chosen for them.

Presumptive Eligibility Programs

Medi-Cal provides certain individuals with temporary and immediate coverage before they are formally determined eligible for a Medi-Cal program. These programs grant individuals with presumptive eligibility (PE), meaning they are presumed eligible without a full eligibility determination. However, a full Medi-Cal application must be submitted within 60 days of PE coverage or PE will be terminated. Depending on the program, Individuals are enrolled in PE by participating providers and not done through the County Social Services office or CoveredCA.com. There are specific presumptive eligibility guidelines for pregnant women, women diagnosed with breast or cervical cancer, and individuals in need of hospital services.

Former Foster Care Children’s Program

Effective January 1, 2014 as part of the Medi-Cal expansion, the Former Foster Care Children’s Program (FFCCP) extended coverage to youth, up to the age of 26, who were in foster care on their 18th birthday regardless of income. If an individual previously aged out of the FFCCP, but is under the age of 26, the individual still qualifies for no-cost, full-scope Medi-Cal benefits up to their 26th birthday. The FFCCP group does not go through MAGI income determination.

Estate Recovery

Since Medi-Cal pays for medical care for some people whose savings and income are too low for them to pay for their own care, the cost of an individual’s medical care, or the premiums paid for care may be required to be repaid to Medi-Cal upon the individual’s death. The costs that Medi-Cal will evaluate are those incurred over the age of 55 or for nursing home or long term care incurred prior to the age of 55. Medi-Cal will also not seek reimbursement for services that are also covered under Medicare if the beneficiary is enrolled in a Medicare Savings Program. Repayment is never more than the value of the assets the individual had at the time of death. The amount repaid will be used to pay for medical care for others who need it.

Using Medi-Cal and private insurance plans

It is possible to have Medi-Cal and other types of health coverage. In most cases, when an individual is enrolled in Medi-Cal and private or employer-sponsored health insurance, Medi-Cal will pay for services not covered by the primary insurance. Under federal law, anyone currently enrolled in restricted-scope Med-Cal or with a SOC may purchase subsidized coverage through Covered California, because these forms of Medi-Cal are not considered minimal essential coverage under the ACA.

It is not possible to qualify for MAGI Med-Cal and Covered California with subsidized coverage at the same time. However, if a consumer is enrolled in a Covered California health plan and is subsequently determined to be eligible Medi-Cal, they will receive the tax credit for the time they were enrolled in the Covered California health plan.

Download the full Medi-Cal Eligibility, Benefits and Options Advance Study Course

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