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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


November 2012 Archives


Question: Can i enroll in the ca health benefit exchange if my spouse has employer coverage.

Answer: The ACA states that when “the premium being charged to the employee exceeds 9.5% of the employee’s household income” the employee (and or spouse and dependents) may enroll in coverage through Covered California. For example, many employers make a contribution of 50% or more to the employees’ premium, but nothing toward spouse and dependents. In that case, the premium cost for a family of 4 will often exceed 9.5% of household income. In the coming months, Covered California will define how it will handle the eligibility of individuals within families who qualify for different programs, like Medi-Cal, Covered California premium-subsidized private coverage, and group coverage.


QHP Evaluation Factors

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Question: How will the Exchange decide which carriers it will offer in Covered California?

Answer: The Covered California Evaluation Team will try to select a high-quality choice of QHPs at the best available price in every corner of California. The Exchange said that it will give greater consideration to proposed QHPs that promote the following:

  1. Affordability for the consumer and small employer - both in terms of premium and out-of-pocket expenses.
  2. “Value” competition based upon quality, service, and price.
  3. Competition based upon meaningful QHP choice and product differentiation.
  4. Competition throughout the state.
  5. Alignment with providers and delivery systems that serve the low-income population.
  6. Delivery system improvement, effective prevention programs and payment reform.
  7. Long-term partnerships between the Exchange and Health Insurance Issuers.

Question: You have posted some Covered California benefit plan outlines. Are these pretty much what qualified plans in the Exchange will look like?

Answer: The Covered California benefit plan designs are preliminary and meant for discussion only at this time. The deductible, co-payment and coinsurance mix, are subject to adjustment after the release of the federal actuarial value calculator. But these plans provide us with a perhaps “quarter-final” look at how Covered California is trying to balance the cost-sharing variables within the ACA framework of essential health benefits and actuarial value guidelines. Notice that HMO Plans are called Copay Plans and PPO plans are called Coinsurance Plans in the Exchange.


Outside Covered California

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Question: Will individual health insurance plans still exist outside of the exchanges?

Answer: Individual health plans will be offered outside of Covered California. Individuals who do not qualify for premium subsidies based on their income are free to purchase their health insurance coverage directly from their favorite health insurance company. However, the plans available outside the exchange will mirror those offered in the Exchange.


Premium Subsidies in Groups

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Question: My employer only pays 50% of the premium for me and nothing for my kids. Will I be able to get a premium subsidy?

Answer: If an employee is offered “affordable” health care coverage through an employer-sponsored plan, he or she is not eligible for premium-subsidies through Covered California even though their income would qualify them for a subsidy. Your children are not offered affordable coverage however, so if your income qualifies you for a subsidy, you will be able to use it on your kids’ insurance in the Exchange.


Question: Your website says: “Additionally, catastrophic coverage only plans will be available to individuals under the age of 30.” I’m in my 40s and already have an individual health plan that’s a catastrophic plan (Kaiser’s 50/5000, where there’s a $5,000 deductable and $6000 OOP Max). Will I be granfathered in at that plan if I want to keep it? And will companies such as Kaiser or HealthNet continue to offer such plans? Or if these plans are only offered to those under 30 on the exchange mean that those over 30 who have them, will have to be moved to a different plan type starting in 2014?

Answer: Kaiser will probably not continue to offer the plan you are on after Jan 2014, because Kaiser will have to offer the same plans outside Covered California as they offer within. As you say, you will not qualify for the Covered California Catastrophic Plan ($6,350 deductible) because you are over 30. The Covered California plan most like the one you have now would be a Bronze Level Copay plan with a $2,000 deductible and $6,350 out-of-pocket maximum. We’ll have to wait and see how the premiums compare.


Question: My AGI will be steadily decreasing from 2012 to 2014. Which year will determine the amount of the premium subsidy available for 2014. I am currently on a HIPAA policy.

Answer: Your eligibility for a subsidy will depend on your modified adjusted gross income (MAGI). How is it modified? The online application process will automatically use the AGI from your most recent 1040 as a starting point. Then you’ll be asked to estimate your annual income in the year in which you are to be insured, 2014 initially.


Question: My husband was updating his medical insurance papers at work & the HR lady told him that if his spouses employer offered health insurance I had to take it. Is this true? Ive always had coverage with him. Plus if I get my employers I have to pay half which would be 200-300 per month. She told him if he put on his paperwork that my employer did not offer it that it was a felony.. Can i thank Obama for this?

Answer: No, this is not part of Obamacare. Yes, an employer can force its employees to accept the health coverage offered by their employer even if that means more out-of -pocket costs for the employee. Employers can make it a condition of employment if they so choose. There is no law governing this practice, It is similar to a company policy requiring that employees have (and pay for) uniforms.


Question: I had back surgery (a straightforward discectomy) just over six months ago. I am now pain free and no longer receive any kind of treatment. I am at the end of my husband’s group COBRA plan (at the end of 2012), and we need to re-apply for insurance. I was told that I would definitely be denies insurance if I had had back surgery within six months. Now that I am more than six month past my surgery, is an insurance company likely to deny me? Are there any companies that might be more likely to cover me given my surgery? Is there anything I can do to improve my chances of getting approved?

Answer: Sometimes 6 months is enough to satisfy the underwriter. If it is disc related, operated, and sign symtom treatment free for a minimum of six months you could be considered with a physician statement that attests to your treatment and current status. You should work with a good agent. You would benefit from some professional assistance.


Question: As a small group health plan in PA (less than 20 employees), employees/dependents age 65 over increase my premiums substantially. Because of my group’s size, is it legal to offer incentives to entice them to go off the group plan and onto Medicare at age 65…or simply not offer coverage to those actively at work age 65+ since they have other options and the younger employees don’t.

Answer: This one comes up often so I’m going to quote chapter and verse:

“Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouse’s secondary coverage for items and services covered by Medicare. Employers may not sponsor or contribute to individual Medigap or Medicare supplement policies for beneficiaries who have or whose spouse has current employment status.” (Excerpt from CMS Medicare Secondary Payer Manual, Chapter 1, (Rev 34,09-07-05)).

If an employer offers a Medicare beneficiary an incentive, financial or otherwise, not to enroll in the group, the health plan is subject to a civil money penalty of up to $5,000 for each violation. In addition, an excise tax could be applied that would equal 25% of the plan’s expenses incurred during the calendar year. This applies to all groups -large and small.


Calculating Your Subsidy

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Question: What does household income consist of exactly? Is it adjusted gross income, line item 37 on 1040? or taxable income, line item 43? or something else altogether? Also, my husband is on Medicare and I am only 61 so will signing up for health insurance as soon as it is available in 2014. I should qualify for federal subsidy but is it based on the FPL of our family of 2 even though my husband is covered by Medicare and will not be using this program. Thank you.

Answer: Your eligibility for a subsidy will depend on your modified adjusted gross income (MAGI). How is it modified? The online application process will automatically use the AGI from your most recent 1040 as a starting point. Then you’ll be asked to estimate your annual income in the year in which you are to be insured, 2014 initially.


Health Insurance for undocumanted

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Question: I teach English in Los Angeles to undocumented students from Mexico. They ask me how they would get health insurance through the new Obama Administration plan?

Answer: Obamacare rules that undocumented residents are not eligible for public health - Medi-Cal - coverage or for subsidized coverage in Covered California. Undocumented residents should be able to purchase health insurance in the open market as they can now.


Question: Does Obamacare cover children dental and vision to 26 years old?

Answer: No. When the Affordable Care Act (ACA) is fully implemented in 2014, Qualified Health Plans (QHPs) will include some dental coverage for children through age 18. Covered California still has to decide what that coverage will include. The Covered California will offer optional stand-alone dental and vision plans for all residents under 65.


Question: I attended a panel discussion recently that included Peter Lee, Executive Director of Covered California. He referred to “assisters” as well as navigators. What are assisters? Are they same as navigators?

Answer: In California, Navigators and Assisters are essentially the same thing. Their roles and responsibilities are virtually the same. Both Eligible Navigators or IPAs must be affiliated with an Assister Enrollment Entity. The difference is in how they are compensated. Assisters are paid a flat-fee of $58 per successful application and $25 per successful annual renewal. Navigator entities are paid for performance-based block funding based on meeting Covered California enrollment targets. However it’s important to note that that it is the enrollment entity that is compensated by Covered California and then the entity in-turn compensates assisters or navigators that are affiliated with it. Assister training and certification will begin in August 2013 so that IPAs are ready to assist with Covered California enrollments beginning October 1, 2013. Navigator certification will not begin until November 2013 because the exchange will need time to conduct an analysis to determine where enrollment assistance gaps occur (geographic areas or targeted market segments) then grants for the Navigator Program will be awarded to enrollment entities to fill-in the gaps. Navigators are expected to begin enrollment assistance in December 2013.


Why are 2014 Premiums So High?

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Question: The 2014 monthly premium used in the subsidy illustration on your website is $1,187 for a family. Can you explain why it’s so high?

Answer: Yes. The “unsubsidized” premiums used in the premium subsidy illustrations are unrealistically high for California residents. Here’s some reasons of the top of my head:

  1. In 2009, while the Affordable Care Act was still being debated, the Congressional Budget Office (CBO) was asked to access how the ACA would affect healthcare costs by 2016. It was a very educated guess and part of the challenge based on predicting the rate of medical inflation over a 6 year period. They had no hope of being very accurate to begin with and, as it turns out, premium inflation (at least through 2012 was lower than forecasted. They came up with a annual premium of $14,250 for a family of four. That’s a national average, but California is well below the national average.

Obamacare or Bust!

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Question: My daughter is currently on my group insurance from work. I am spending almost $600 a month just for her. I would like her to get on an individual plan, but she is overweight and I am told she will be denied (they cap it at some point). Can you advise me where I can turn? How does Obamacare fit it here?

Answer: My response to your question was forming slowly until you asked how Obamacare fits in here. Obamacare makes your problem go away, but not until January 2014. That’s 14 months from now. In the meantime, you’ll have to stick with what you have.


Working Spouse Rule

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Question: I am on my husbands insurance but have just gotten a job. My husbands insurance has a working spouse rule but his insurance is less expensive for the two of us than if we each get ours separate. Can they really cancel both of us if they find out that I’ve been offered insurance and how can they find out?

Answer: Your husband’s job could be in jeopardy in addition to loosing his insurance coverage, if you lie about not having access to health insurance from your own employer. While you are thinking about gaming the system, think about millions Americans can’t get health insurance at any price. Not your fault. Just saying.


Question: As an agent, how will I enroll people in insurance exchanges under aca in California?

Answer: Covered California will maintain an agent channel so that you an agent can assist his or her clients to enroll in Covered California qualified plans. The agent channel will have to be operational by October 1, 2013 - the date when actual enrollments begin for January 1, 2014 effective dates.


Question: What if California insurers snub Covered California and try to make it fail?

Answer: California health insurance companies are very keen to participate in Covered California. Thirty-three insurers and other organizations have expressed a nonbinding interest in bidding for business through the exchange. As many as 13 plans may bid in the Los Angeles area, and about 20 plans have signaled interest for the San Francisco market. According to Peter Lee, Executive Director of Covered California, “There will be a lot of competition and interest, which will enable Covered California to be an active purchaser in every region and pick the best five or six plans.” Covered California officials are expected to pick the winning health plans and negotiate rates by June, 2013.


Medicare Supplement Upgrade?

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Question:I have a high deductible Med Supp plan. My health is declining, can Im switch to a comprensive Med Supp Plan during open enrollment without penalty?

Answer: You can apply to switch to a different Medicare supplement plan at anytime of the year. However pre-existing conditions would be considered. In California you are guaranteed to switch to a like for like or lesser plan from any carrier during your birthday month. However, if you want to move to a more comprehensive MedSup plan (considered an upgrade) your health history will be considered and you could be denied the plan change. But it is not too hard to qualify for a supplement plan even for those with pre-existing conditions. One carrier will take people as long as they have not been in the hospital 90-days prior to applying.

A Medicare Advantage Plan would be more comprehensive coverage than your current Original Medicare and a High Deductible Supplement. The Medicare Advantage and Part D Prescription Drug Open Enrollment is between 10/15-12/07. During this time, you will qualify regardless of pre-existing conditions other than End Stage Renal Disease.


How do I keep my HDHP HSA in 2014?

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Question: I’m 43, self-employed, and my family of 3 is covered by an HDHP/HSA Compatible Plan where our premium is $384/month. I would like to keep this policy in 2014, but I am reading that a typical “Bronze” Qualified Plan will cost $1000/month or more. How can I keep my current health plan and payment that I like?

Answer: Yes you can keep your HSA in 2014. No one knows what the premium of comparable coverage in Covered California will be for your family in 2014. Your scenario - $384 to $1,000 - is a 260% increase. That won’t happen. Moderate increases can be expected, but nothing like that. Besides you may qualify for a premium subsidy, and end up paying less, maybe a lot less. Covered California HSA coverage will be different - lower deductibles and higher coinsurance - but basically the same bottom line in terms actuarial value. HSA-qualified HDHPs will be available outside of Covered California as well.

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