The Real Pros (and Cons) of Post-ACA Health Insurance in California

obamacareWhile Congress postures and pundits postulate, the public is actually getting its first taste of post-ACA (Affordable Care Act) health insurance.  The program officially starts in January 2014. However, the California Health Insurance Exchange has had its maiden run in 2014 and is offering very specific prices for an array of plans.  Everyone seems to have taken a deep breath as we all await the law’s impact upon  insurance prices. Without claiming any psychic powers,  I can  predict with a high degree of certainty that my health care costs will drop considerably……however others may not be that fortunate. Here’s how to find out about your health insurance premium future:

 

The key point, folks:  the Health Insurance Exchanges are focused upon providing health insurance for the relatively small number of Americans who don’t have health coverage through their jobs and/or government programs  (Medicare, for example).   But it isn’t just limited to those 30 million Americans who are uninsured.   As I began to write this blog, I received a letter from my current insurer, Anthem/Blue Cross.   The company informed me that due to ACA,  it was discontinuing my current health plan for which I pay $291 per month  (Smartsense Plus 6000 STD RX). It recommended a comparable ACA-compliant program for me called  Core DirectAccess-CAAO. The cost of this allegedly comparable plan:  $488 per month.  Ouch!   Looks like I’m now, technically, uninsured as of January 1.   Fortunately, I never was all that excited about Anthem/Blue Cross and this sealed the deal for me. Goodbye Anthem, hello Covered California.  I was ready to start shopping!

In October 2014, we started at Covered California’s web site to comparison shop.  This is the consumer portal for the California Health Insurance Exchange set up to comply with the ACA.  We plugged in some basic information about my location, age and income. Voila! We were presented with a number of different plans with different plan details.    The bad news: there was no plan offered that was identical in copay, deductible and other terms to our previous Anthem ‘Smartsense‘ plan. So comparison proved to be a challenge between pre-ACA and post-ACA plans. However, Covered California offered two program categories  (Bronze and Silver) that were sufficiently close enough to the ‘Smartsense‘ plan so we checked the premiums for the eight plans offered in those categories.  The premiums ranged between $450-$500 depending upon the provider.   Double ouch!

However, there was some good news.  There’s the premium and then the premium after your tax credit and the difference was dramatic.   As a result of the ability to get tax credits for the ACA plans,  my monthly cost for both of these plans dropped to $200-300 per month, depending upon which plan and provider we chose.  (No way we’re choosing Anthem/Blue Cross — that’s for sure!)  This amounted as much as a 30% drop in my medical costs for an almost comparable plan.   Out of pocket savings: $1,200.   Wow!  If you choose not to avail yourself of the tax credit, you can get direct Federal premium assistance, where the government will send the subsidy directly to the insurer thus reducing your out of pocket costs. You can learn more about premium assistance at the Covered California website.

There’s been a lot of media attention about the failures of the health exchange websites (“debacle”  is thrown around a lot).  We can report that one month after we notified Covered California of my intent to buy health insurance through the exchange, I received an email indicating that the enrollment was now open.   It was a fairly straightforward process and took about 40 minutes.   We made ourfirst monthly payment  (which was $201 per month for a Silver-tiered product)  and then waited.   Within two weeks of completing the process,  we received a phone call from the health insurance carrier (Sharp) and the following week, received our cards.  The process wasn’t perfect, but with some perseverance it worked and I’m saving $100 per month while getting insurance coverage with lower co-pays and deductibles.

We strongly urge individuals earning less than $45,960 or families earning less than $94,200 to explore whether you are eligible for financial assistance in purchasing coverage through the exchange. The level of financial aid you receive will be based on your income and your family’s size.  The savings could be thousands of dollars a year. The ACA also allows for cost-sharing assistance, which reduces your co-pays, coinsurance and deductibles.  Cost-sharing assistance is available to people with income between 100-250% of the Federal Poverty Line.  For an individual, that would mean where your income is no higher than $29,000.  Remember to inquire about your eligibility for this assistance program.    For more information on the elements of the ACA programs,  Enroll America has developed an excellent web-based resource.

So for all those doom-saying pundits who view the ACA as the scourge of all that is good and righteous — none of you are going to get any portion of the $1200 that we save each year.    As to those who stuck out their neck and supported ACA — like Hillary Clinton who first floated the idea almost 20 years ago and Barack Obama who renewed the fight and took the punches — thanks for the savings.  If you don’t live in California,  it is worth visiting Consumer Union’s website about health insurance options.  But that’s just me and my circumstances may differ from those of other consumers.  As with most any reform, there will be some winners and losers.  The likely winners are people with moderate or low income who can use the tax credits to reduce their health insurance costs.

According to the Los Angeles Times in an October 2016 report, Obamacare has worked in California.  The state has recorded some of the nation’s most dramatic gains in health coverage since 2013 while building a competitive insurance marketplace that offers consumers enhanced protections from high medical bills.Californians, unlike people in many states, have many insurance choices. That means that even with rising premiums, the vast majority of consumers should be able to find a plan that costs them, at most, 5% more than they are paying this year.   The Times reports that between 2013 and 2015, the share of working-age adults in California without coverage plummeted from 23.7% to 11.1%, according to federal data. Only three states saw larger declines over the same period.The new coverage has dramatically improved patients’ access to medical care and reduced financial strains, other research indicates. More than three-quarters of newly insured Californians said their health needs are now being met,according to  a recent survey by the nonprofit Kaiser Family Foundation.

Other Options for Insurance Customers

For those consumers who have moderately high incomes,  the California Health Insurance Exchange programs may not be as economically attractive. However, there will continue to be private insurance programs sold through other markets that may be more affordable than those sold through the Health Insurance Exchanges.   There are a number of insurance shopping sites that will continue to sell unsubsidized health insurance plans.   Also, the White House announced that consumers who currently have health coverage can maintain those policies through 2014, even if they don’t comply with ACA.  So you can preserve your current plan at its current cost for one additional year, as the health insurance markets work through the new program.

And if you are under the age of 40,  we continue to strongly recommend Health Savings Accounts (HSA).  The HSA allows you to make an annual tax-deductible contribution for current and future health care costs.  What you don’t use remains tax-free and can be used for future health care costs until you turn 65.  For young, relatively healthy people, HSA is a very good cost-proposition.  Also, we believe it to be ideal for self-employed individuals and families.   There’s more information about the benefits of an HSA account at this blog.

We’ll be learning more in the coming months about the impacts of the ACA upon health insurance costs and we’ll share what we can with you.   What seems apparent currently is that the ACA is functioning as it was designed to function.  (for more about this, check out my blog about the need for health insurance reform) For those trying to figure out whether ACA is good or bad, we recommend that you disregard the pundits and politicians for the time-being. The proof will be in the tasting of the premiums.

For those you are interested in learning the true facts about Obamacare and its impact upon consumers,  here’s a video blog that I recommend:

 

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16 replies
  1. forex forum
    forex forum says:

    Hi to every one, the contents existing at this web site are really amazing
    for people experience, well, keep up the nice work fellows.

    Reply
  2. Stephanie
    Stephanie says:

    My situation is almost identical to Julie’s. We had a great PPO plan with Anthem Blue Cross , the Premiur 3500. Our policy was cancelled because it didn’t cover maternity (which we don’t need) and Anthem moved us the what they described as the best equivalent to our cancelled plan, the Direct Core Access – caan. We purchased out plan directly from Anthem from the get go. Despite feeling frustrated and ripped off that our deductibles and out of pocket had doubled and are premium went up, we succumbed to the “mandate”. The first attempt at going to our normal doctor to get my daughters ear checked payment was denied ! I thought we could keep our doctors? What. I called Anthem and the customer service rep told me all I could do was file a grievance. I did. No word back. Then I called the medical billing customer service to let them know I wasn’t avoiding payment of the unpaid bill, but had filed a grievance. She proceeded to tell me what a mess this healthcare law ha screamed and then broke down for me why I “will have trouble down the road using that insurance card”….because it says Pathway on it and is a Covered California exchange plan??? What! I never even went on that site. We don’t qualify for.a subsidy and still I did not trust the site because it was deemed insecure!!! Now I am furious. How can Anthem sell me something and not be forthright what is is? Furthermore, the hospital 3 min. From my home is now out of network and so are a few doctors. We use. Something is not right /legal here? More money, less options and sold me a bag of air basically. Help.

    Reply
    • admin
      admin says:

      Thanks for sharing your story, Stephanie. I’ve encouraged others to file a complaint with the Department of Managed Care, just so your situation is investigated by the state. Just take the comment that you wrote here and copy/paste it into the Department’s web-based complaint page. Let us know what happens.

      Reply
  3. Julie
    Julie says:

    I’m in a situation very similar to Cynthia’s, and I would love some advice about what to do. My family of 4 had a private insurance plan with Anthem Blue Cross (Smart Sense 6000) since 2011. We were migrated to a new plan as of 1/1/2014, Core
    Direct Access PPO – CACS, which Anthem described as the plan closest to the SmartSense plan we had, albeit with considerably higher premiums. None of us has gone to the doctor so far this year. Last week I made an appointment for one of my daughters to see our family physician later this month. I received a call a few days ago from the billing office (PAMF) saying that they do not take our insurance because it is a “Covered California” plan. I insisted that they were mistaken, as we did not purchase our Anthem plan from the Exchange, but it was a migrated plan from our previous privately purchased Blue Cross plan, which had covered all our office visits previously. They said that the plan (Core Access ) is considered a Covered California plan, one of the “Pathway” plans, and therefore they cannot accept it. I then contacted Anthem (waiting on hold for almost a full hour) only to to be told that our plan does not allow us to see ANY of the doctors we had been seeing prior to Jan 1. They then sent me a list of general practitioners we COULD see; according to their list, there was not a single doctor within 10 miles of our home (Santa Cruz, where there are multiple medical centers and dozens of doctors offices within 2 miles of where we live.) The representative of Anthem Blue Cross was extremely unhelpful, and didn’t seem to understand why I would be frustrated. We are paying $1600 per month for a health insurance plan, purchased privately and not a subsidized covered ca plan, and can’t even make a single office visit appointment with any of the doctors that our family has depended on for the past 15 years? This is INSANE!!!! I will be applying for Blue Shield for the future, but I wish I had a clue as to how or to whom to address this complaint. I keep feeling that this must be some kind of administrative mistake! I would appreciate any and all suggestions. I would also like to be part of any class action against Anthem or whoever is responsible for this totally unfair situation. Thanks!!!!

    Reply
    • admin
      admin says:

      First, we recommend that you file a complaint with the Department of Managed Care, just so your situation is investigated by the state. However, there’s more. Anthem has created two tiers of customers — whether you buy on the Exchange or not. One is an EPO and one is a PPO. It appears as though the Core DirectAccess is an “EPO” and therefore has a narrower provider network. You can check out the providers at this link. It appears to show a large number of providers within Santa Cruz, thus contradicting what you were told by PAMF. The list that you sent doesn’t appear to match what the company has posted on its website — be sure to mention that to DMC. Because this is a state-regulated industry, it is unlikely that there will be any class action lawsuits, but we’ll keep readers apprised if one does appear. In the meantime, take advantage of that regulatory oversight and make sure to contact DMC.

      Reply
  4. Cynthia
    Cynthia says:

    My family of 4 had a Blue Cross CA individual policy for $800 a month. We received a cancellation notice in late ’13 and were told we would automatically be rolled over to their Core DirectAccess – CACS plan for $1300 a month. That was a big jump, but we went ahead. In early January I had an MRI at Palo Alto Medical Foundation only to learn when the bill came in that they are NOT in-network for the new plan (they were for the old plan). How I would have figured this out the first few days of January when Blue Cross had not yet sent me a new membership card, had not sent me a welcome packet, had not put up a big warning sign on its website, and had not gotten the providers to warn patients when they arrived for appointments and hadn’t even hinted at the name “Pathway” in any communication I received from them I really don’t know. So now my doctor, my husband’s doctor, the kids’ pediatrician, several local hospitals, etc. are no longer in-network. Sorry, but increasing my premium that much and then denying me care with so many doctors, clinics and hospitals feels like a raw deal.

    Regarding your response to Eileen who is asking whether or not to stick with Blue Cross, my understanding is that California turned down the offer from the federal government to extend current insurance plans into 2014 (now extended to 2015). So those of us in California have very limited options. (Eileen, take a look at HealthNet. Our pediatrician recommended them as having a broader network of doctors and hospitals.)

    Reply
  5. eileen
    eileen says:

    I am a self-employed single mother, and I presently have an individual plan from Anthem. I had the same plan as you did – SmartSense 6000 – and in 2013 paid $381/month for me and my two kids. Anthem just switched me (as of January 1, 2014) to its Core Direct Access (caae) plan for $610 per month. I could switch to a different plan (cacf) with a $5000 deductible per person, which would cost me $575 per month (once I tack on the required dental plan). I made about $75,000 in 2013 and when I applied to the exchange I was not eligible for any subsidy. Do I stick with Anthem’s plan (I’ve had an ok experience with them) and just suck up the extra $200 per month? Why am I not eligible for the tax credit??

    Reply
    • admin
      admin says:

      Hi Eileen. Thanks for writing. You may be up against it given that the Anthem plan renewed on January 1, 2014. I strongly recommend two actions that you can take. First, the White House authorized a change in the law’s implementation that would allow insurers to extend current plans into 2014 and permit you to re-enroll at the prior price. Second, there are a number of private insurance exchanges, like ehealth.com that are worth looking into. Check them out.

      Reply
  6. james
    james says:

    I just signed up for A Blue Cross and according to the covered ca website I’m to recieve a subsidy (financial asst) that covers over 90 percent of my premium. The problem is I’m still waiting for the govt to get off theor butts and pay this assistance to BC. I called BC and they tell me to call covered ca, I called covered ca and thet tell me to call Anthem??? very frustrating. According the coverd ca site my apppication has been processed and I should be recieving a letter from ABC 30 days before my ins is to start if not to call the ins carrier, i did that and they gave me no info, basically just said we’re waiting for the giv’t to send us all the paperwork before we can enroll you…geez what a nitemare. I assume come january 1st i’ll no longer have insurnace because of this mess.

    Reply
    • admin
      admin says:

      I had a similar experience where I was signed-up with a health care provider but never got any notification from that provider. I logged into the Covered California website and under the progress bar, clicked enrollment. That brought me to a page that showed the status of my application, the case number and the contact info for my insurer. With that, I was able to sign up and pay the first month’s premium. Once I figured it out, it was pretty straightforward. Give it a shot.

      Reply
  7. tony
    tony says:

    Insurance cancelled. finally got online with California, under $45,000 income and still received no break, plans stunk and price went way up, way to go Obama!!!

    Reply
    • admin
      admin says:

      Tony, perhaps if you give me a few more details about what you found, I might be able to help. I went to the California Covered website after your comment and found a number of very low priced options listed assuming a $40,000 income. Perhaps you can share with us the range of prices/coverage that you found and how they compared to what your previous insurance had been. From the best that I can tell, based upon what I’m reading and hearing from friends, the deals are out there. I’m perplexed that you couldn’t find them.

      Reply
  8. WLB
    WLB says:

    Our insurance plan could be grandfathered, but subsidies don’t apply to old plans. They only apply to ACA compliant plans. Since we qualify for subsidies, we either take and ACA plan and the subsidies or keep our old plan and get nothing. Call it blackmail or coercion, but the power of the pocketbook is being leveraged against people. HSA accounts coupled with a major medical plan are a great way to go. Our 27 year old son who has a MA and no job get’s insurance for free, we can get subsidized insurance. The question is where’s the money coming from? This isn’t healthcare reform. It is health insurance reform that is more complicated than the old system. It isn’t based on my good health, but on the bad health of a minority. Long term that’s bad business. Time will tell.

    Reply
  9. Donna Jensen
    Donna Jensen says:

    I have the same plan as you and I too looked at ACA plan. The cost difference is no difference. The only difference is that I don’t qualify for any financial assistance, so the ACA doesn’t do anything for me but raise my costs. I’m sticking with private insurance — the government already has too much of my personal information.

    Reply
    • admin
      admin says:

      No question, Donna, that if you don’t qualify for the subsidy, then the Health Insurance Exchange is probably not the best shopping venue, although we haven’t seen yet how the private markets will be responding. In theory, the private insurance markets will drop costs so as to be competitive, but that assumes a competitive market in health insurance and that assumption is theoretical, at this point. There are a number of insurers who have chosen not to participate in the Health Exchanges, so it will be interesting to see how they position themselves. As to your point about the government having too much of your personal information, please be aware that the “government” will have no less and no more access to your medical information than if you were to go with private or Health Exchange programs. The move to centralized medical databases appears to be irreversible — for good or bad — so I’d not recommend you make a decision about health insurance based upon that particular criteria. Good luck exploring your other health insurance alternatives and feel free to share your findings with us!

      Reply

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