Column 31 BSCA extensions- time to wake up MediCAL Estate recovery

If you have a non-grandfathered individual  health insurance coverage through Blue Shield of CA and you requested an extension to 3/31/2014, it's time to pay attention.  To be effective 4/1 your application must be in by 3/15/2014.  I expect that to be another very busy time, so better to get it in in February. Now is the time to review your alternatives with your agent and make decisions.  Reviewing networks and products will take some time.

I continue to find folks that do not understand the new MAGI MediCAL eligibility rules.  Do you know you could be a millionaire and still eligible for MediCAL?  It is primarily dependent on your income.  There has been a lot of confusion about the Estate Recovery provisions in MediCAL.  Covered Shasta is going to post their brochure explaining how this works for folks that are concerned about repaying any benefits that are received from MediCAL.  Look for it at www.coveredshasta.com.

With all the technical issues, glitches and details sometimes we lose track of the very human side of this equation.  This week I had a referral from an existing client come in.  She had heard about the new law but didn't really understand it.  She was facing a premium notice for her husband and herself of about $850 per month for a high deductible plan.  The family has been slowing digging out of some financial setbacks from the "great recession".  The family income is about $30,000.  The husband is a contractor and really wanted nothing to do with "Obamacare", but the wife decided to check it out.

When we reviewed the information the net premium for the Silver ($2000 deductible) plan will be $115 monthly.  We went through the enrollment process and confirmed the $115 premium, net of the subsidy or APTC (Advanced Premium Tax Credit).  She hugged me and said this was a game changer for her family.  They were struggling at trying to figure out how to pay the health insurance premium. Since her husband is a self-employed contractor he is exposed to all kinds of potential risks daily and has no worker's compensation coverage.  Insurance premiums for a high deductible plan at over 30% of their income was just not an option, but they didn't want to lose their home or go into bankruptcy if they had a medical issue. 

This is not the first time I have had a similar situation.  Not everyone gives me a big hug, but I can see a very real sense of relief when we look at the net premium after subsidy for these families.

The process is still a very messy one, the networks are smaller and the benefits skinnier. Access to care will likely be more limited.  But the bottom line is that the cost of insurance is prohibitive for many people.  There are still those that will be paying premiums that equal a house payment.  They don't qualify for a subsidy.

While it would be simple to blame that on the "greedy insurance companies", the reality is that the new rules require 80-85% of premium to be paid out in direct medical expenses.  In fact, Blue Shield of CA has been operating at that level for several years.  Clearly,  big driving force in premiums is the cost of care, which is the 85% of your premium dollar. 

The costs of care will be further analyzed by the data collected under the PCORI (Patient Centered Outcomes Research Institute) tax or fee added to all insurance premiums.   This data will be on a much broader scale than ever before provided and will provide more specifics on the waste in the system.

This is only part of the solution and is still a long time coming.  It is a huge system with lots of room for improvement, but we must all face the fact that spending 18% of GDP in one segment of the economy is not sustainable.

Covered Shasta our local stakeholders group is planning an Enrollment blitz on Feb. 18th. There will be several locations dedicating that day to enrollment.   Keep an eye out for more information about how you can participate! 

*Information provided in this column is "to the best of my knowledge based on press deadline. Submit your questions to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it to be answered in the paper.