Author: Lucien Wulsin

Thoughts On Financing Care And Coverage For Those Who Are Uninsured and Ineligible for Covered California and Full Scope Medi-Cal Due To Their Immigration Status

At least half of California’s undocumented residents are uninsured, while the others are covered through their employers, and to a lesser degree, through state limited benefit programs. The undocumented are ineligible for Covered California, and eligible only for limited scope Medi-Cal that covers genuine emergencies and maternity care. This report examines alternatives to covering and caring for the undocumented in California.

The challenge for California is to assure care to an undocumented working population that is not evenly distributed throughout the state, but rather most heavily concentrated in the Central Valley, the Central Coast and Southern California counties. There are several approaches to financing care and coverage for the undocumented. First, their care could be covered by California’s county safety nets. Second, they could be covered by the state of California. Third, they could be covered by their employers or by private individually purchased coverage. Fourth, their care could be partially funded by the federal government. Lastly, we could consider hybrid programs and shared responsibility.

Download the brief here.


Newsflash: The Sky is Not Falling

The annual survey of employer health benefits by the Kaiser Family Foundation for 2014 reports the following:

  • The average premium for employee only coverage increased 2%; the average premium for family coverage increased 3%, and the average worker’s wages increased by 2.3%.
  • Covered workers pay 18% on average as their share of individual coverage and 29% of family coverage.
  • The rates of employer offer, and employee take-up are statistically unchanged.
  • 25% of large employers now offer retiree health benefits – statistically unchanged.
  • More employers (a third) are offering wellness programs and incentives, more (19%) are offering high performance tiered networks; more (13%) are considering private exchanges, but only 3% are offering them; more (12%) are offering reference pricing; more (8%) are offering narrow networks.

On the other hand over the last 15 years, employer coverage has been decaying

  • The rate of employer offering has fallen from 68% to 55%.
  • Employee contributions towards coverage have increased at 4 times greater than employee wages.
  • The percent of workers covered through their jobs fell from 70% to 62%.
  • Large employers’ offer rates of retiree health benefits fell from 40% to 25%.

In other words, reform was needed, and to date the ACA appears to be working for the American workers and their employers. These are good building blocks, but it’s far too soon to pop the champagne.

New York’s New DSRIP Waiver & What It Could Mean in California UPDATED

New York state and CMS signed a new DSRIP waiver in April 2014. The goals are transforming the state’s health care system, bending the Medicaid cost curve and assuring quality care for all Medicaid members.

The waiver puts an emphasis on transformation of the safety net, cost reduction and improved outcomes. It is built on collaboration, collaboration, and more collaboration to achieve these goals — a very different model from California’s 2010 DSRIP waiver, which was facility focused. Collaborative partners in New York’s new waiver include: hospitals, health homes, SNF’s, FQHC’s, behavioral health providers and home care agencies.

The state of New York has agreed to reduce the projected federal Medicaid spending by $17 billion over the five years of the waiver and the federal government has agreed to reinvest $8 billion of these projected savings into Medicaid transformation in order to get the actual savings. New York plans to reduce spending on avoidable hospitalizations by 25%.

Read the full brief here.

Summary and Analysis of Burwell v. Hobby Lobby 573 US — (2014)

The Supreme Court held yesterday that a family owned for-profit corporation could invoke the Religious Freedom Act to claim an exemption from offering coverage of contraceptive services to their employees

The Affordable Care Act requires large employers and those small employers offering coverage to cover preventive services that are of proven effectiveness and meet the effectiveness criteria of the US Public Health Services. Exemptions are available for grandfathered firms. Furthermore there can be no copays for effective preventive services.

Contraceptive services are part of the list of demonstrated effective preventive services. Hobby Lobby and the other plaintiffs objected to four specific contraceptive services, essentially IUDs (Intrauterine Devices) and morning after pills, saying they were equivalent to abortion and against their religious beliefs. They argued that they would comply with the rest of the Affordable Care Act, but in their religious conscience could not offer those four contraceptive services due to their religious beliefs.

HHS gave religious exemptions to churches and other comparable religious non-profits who have religious objections to contraception. In order to preserve access to contraception for men and women who work for these exempt employers; they created a work-around so that insurers would offer the services at no cost to these employees. Since the contraceptive services are a cost saver, rather than a cost increaser, the insurers can offer them at no additional premium cost.

The majority opinion says that the 1993 Religious Freedom Act requires HHS to offer the same workaround for the religiously motivated for-profit, family-owned plaintiffs. The dissent says that the majority misreads the Religious Freedom Act. It’s an interesting legal discussion for those interested in statutory construction. Here are some highlights as I see them.

  • The court majority says that corporations are “people” and protected by the RFA while the dissent says that the RFA reaches only real people who go to church and have religious beliefs, not corporations who by their very nature do not go to church or have religious beliefs. The legislative history seems to favor the dissent on that one.
  • The court majority says that HHS must offer the same “least restrictive” accommodations (i.e. the no cost work-around) to for-profit corporations with sole family owners with strong religious beliefs as they make for the churches who teach those beliefs. The dissent says that church exemptions are for genuine “churches” not for the corporations owned and run by people with genuine religious beliefs.
  • Finally the dissent says the majority completely ignores the rights and interests of the men and women employees who also have religious beliefs that may be at complete variance with their employer about the value of contraceptive services. The ACA’s design of covered benefits for all Americans assumes that most Americans will continue to get full scope coverage through their jobs and not through a government program (like Covered California) that is only available to those without an offer of affordable job-based coverage or Medi-Cal that is only available to the poor. The majority opinion reiterates that government can offer the workaround or can expand the Title X, Family Planning Act to reach those men and women employees who cannot afford contraception.

Mirror, Mirror on the Wall, 2014 Update

The Commonwealth Fund has recently released its 2014 update comparing the performance of the United States health system to ten other developed countries. The comparative data predates the implementation of most coverage expansion provisions of the Affordable Care Act so the U.S. bottom ranking should improve, one would hope quite quickly, but most likely at disparate rates in those states that have embraced and declined the ACA coverage expansions.

The United Kingdom, a true socialist system where the government owns and operates the hospitals and employs the doctors ranked highest. The Swiss system which is purely private based on an individual mandate that all Swiss residents purchase private insurance finished second. The Canadian single payor system finished tenth, and the United States ranked eleventh and last.

The United States system ranked poorly on cost, outcomes, efficiency, equity, access, and healthy lives. Its best performances were on effectiveness of care, patient centered care, and timeliness of specialty care.

The Affordable Care Act’s coverage expansions should improve the system’s performance on access, equity, and primary care access. The ACA’s payment reforms for Medicare have the potential to improve quality and outcomes to the extent that they are more widely adopted by private insurers and state Medicaid programs.

California is among the states best positioned to improve the performance of its health system to get better, safer and far more cost effective care.

Click HERE to download the Executive Summary or Full Report

Updated – Better Coordinating Coverage for Pregnant Women: Putting Families First

Covered California plans and nearly all individual and employer-based health insurance plans offer maternity care.  California covers care for pregnant women through Medi-Cal (up to 200% of FPL), Access for Infants and Mothers (AIM) (up to 300% of FPL) and now Covered California covers maternity care (with premium subsidies up to 400% of FPL). In the Medi-Cal program, California offers the Comprehensive Perinatal Services Program (CPSP), which provides health education, psychosocial counseling and nutrition counseling that help achieve better birth outcomes.

The Governor’s budget proposes to shift AIM from the Managed Risk Medical Insurance Board (MRMIB) into the Department of Health Care Services (DHCS) and to give pregnant women with pregnancy-only Medi-Cal eligibility and incomes up to 208% of FPL the option to use premium assistance and wrap around benefits to enroll in Covered California. This appears to us to make a great deal of sense both programmatically and fiscally, but it is just a beginning. We need to make sense of these overlapping programs. While there are many commonalities, there are the following key differences among the programs: coverage for different provider networks and plans, different reimbursements, different rules governing the timeliness of applications, different rules for the undocumented, different rules for subscriber contributions, different covered services and different program administrators. There is an opportunity to coordinate these programs to improve birth outcomes. Premium assistance may allow us to simplify these programs in the best interests of the expectant mothers, their children and their families.

Let’s make it easy for families to understand and navigate. We would suggest that DHCS administer the program for women with family incomes under 138% of FPL and that Covered California administer the program for women over 138% of FPL. This would merge a portion of AIM and a portion of Medi-Cal pregnancy-only coverage into Covered California. Covered California could use premium assistance and the available Medi-Cal and AIM funding to upgrade care and coverage for pregnant women with incomes up to 300% of FPL: 1) upgraded services during pregnancy, 2) reduced copays during pregnancy, 3) reduced premium contributions during pregnancy, 4) adding pregnancy to the list of special life circumstances where enrollment is authorized outside the annual open enrollment period, and 5) continuity of care.

Read the full report here.



60 Days of Open Enrollment in Covered California for COBRA Subscribers Begins May 15th

Individuals with COBRA coverage have 60 days to switch to Covered California. Open enrollment begins May 15th and ends July 15, 2014.

Why might one switch? Some COBRA enrollees are eligible for premium assistance that can reduce their monthly premiums. Some Covered California plans are less costly and offer better coverage than some existing COBRA plans.

Why one might want to stay in COBRA? Some doctors participate in COBRA coverage and do not participate in Covered California plans. Some COBRA plans offer more benefits and at an affordable price.

For more information, see Covered California’s FAQ.

Secretary Kathleen Sebelius

I think we should remember Secretary Sebelius for her results: over 7.5 million enrolled in the Exchanges in the first six months, coverage for young adults through their parents, very slow rise in health care costs, extending the viability and improving the performance of Medicare, and the beginnings of transparency in health spending, prices, and outcomes. Californians will particularly remember her for the 2010 Section 1115 waiver which allowed California’s counties to get a running head start on Medicaid enrollment – 650,000 covered even before ObamaCare launched on October 1. Certainly the federal Exchange computers crashed on her watch due to a combination of poor design and massive public interest, but they got fixed, and enrollment beat everyone’s expectations.

I will remember her best as a Cincinnati “homie”. If I remember correctly, her Dad (finished 1st) and my Dad (finished 18th) ran for City Council on the same Charter Party ticket back in 1953.

Congratulations, Californians

It appears as if we have at least 3.2 million newly enrolled in Medi-Cal (2 million) and Covered California (1.2 million). Another 500,000 Californians began their applications before the March 31 deadline and have until April 15 to complete them. These are phenomenal numbers in just six months. And nationally, 7.1 million are enrolled in the new Exchanges.

We all exceeded expectations and now to need to learn what worked and what did not. The ACA gloom and doomsayers were dealt yet another blow. This is due to the hard work, dedication and cooperation of so many California heroes. But we need to focus now on seeing that people get the health care, the improved patient outcomes, the customer services and treatment by their providers and health plans that they expect and deserve.

ITUP’s regional workgroups start next week, and we hope for a healthy discussion of what worked and what did not. ACA implementation is a work in progress, but in California, this has been an incredible first step on the path forward.

The next open enrollment for Covered California is only seven months away. During the interim, if eligible, you can enroll in Medi-Cal at any time. If during this interim period, you experience a loss of coverage due to “life events” such as job loss or change, divorce, marriage, birth death or other qualifying events you can enroll in Covered California, if otherwise eligible.

Lucien Wulsin, ITUP

April 9, 2014

Twenty Days To Go

March 10, 2014


Dear friends and colleagues,


Just to share with you my thoughts on some of the latest news and information about the Affordable Care Act. Open enrollment for the Exchanges will close for this year on March 31. There are only 20 days left to get coverage through Covered California.

In California, we now have over 2.2 million enrolled — of them about 800,000 are in Covered California, our Exchange, and a bit under 1.5 million in Medi-Cal (our Medicaid program). This is phenomenal in only 4 and ½ months. Most are enrolling in silver (70% of expected medical costs) and bronze (60% of expected medical costs) plans in Covered California because that is where the premiums are lowest and the federal assistance with paying premiums, copays and deductibles is the greatest.  Very few are choosing the plans at either end of the cost spectrum — catastrophic or platinum. While the popularity of platinum is substantially higher in those counties with higher personal incomes, enrollment in catastrophic does not exceed 1% in any of the reporting counties.

The close of open enrollment is March 31, 2014, and the next opening is scheduled for November 15, 2014 until February 15, 2015. In the interim, Medi-Cal enrollment is open at any time with up to three months retroactivity for those who qualify – now $16,105 for an individual and $32,913 for a family of four. You can also enroll in Exchanges (Covered California) during this interim time period for particular “life changes”, which cause an individual to lose or gain the opportunity for coverage, such as marriage, death, adoption, turning 26 and losing parental coverage, or loss of job or an individual’s eligibility for employer or Medi-Cal coverage.

The tax penalties/fees for individuals not enrolling are relatively minor in year 1 — $95 or 1% of income whichever is greater. They increase significantly, however, in years 2 and 3.

Some counties are considering restricting eligibility for county indigent systems for those who are eligible but fail to enroll in Covered California or Medi-Cal. Likewise some hospitals are reportedly considering changes to their charity care policies to increase financial liabilities for patients who are eligible but fail to enroll.

The penalties/fees for mid-sized (50-100) employees who do not offer coverage have been moved back one year – i.e. from 2015 to 2016. The standard for large employers offering coverage is as follows: they need to offer coverage for 70% of their full time employees in 2015 and 95% of their full time employees in 2016. Since most (94%) mid sized and large employers already offer coverage, this just gives a little more time and flexibility for the few who don’t, but does not otherwise have much impact.

There have been lots and lots of confusion about the rules for immigrants.

  • First, undocumented immigrants can get only limited scope Medi-Cal that pays for genuine emergencies and maternity benefits. These have been the rules since 1986, adopted under then President Reagan; that hasn’t changed.
  • Second, in California legal permanent residents and US citizens can qualify for the Exchange or for full scope Medi-Cal depending on their income. These are the rules in California, but they differ in other states.
  • Third, for mixed status families (i.e. one or more undocumented, one or more legal or US citizens), the family can apply for health coverage for those with legal permanent residency or US citizenship. The coverage for those who are US citizens and legal permanent residents is treated the same as any other US citizen or legal permanent resident for Medi-Cal or the Exchanges. The income of the undocumented parent is counted in assessing the family’s income eligibility; their undocumented status is not to be used by the INS to identify and deport the undocumented parent or to deny family members the ability to apply for future status changes (i.e. become US citizens or legal permanent residents in the future). The undocumented parent cannot get coverage through the Exchanges and can only get limited scope Medicaid if their income is low enough.
  • Fourth, “dreamers” are those undocumented young men and women who came to this country as young children and have earned a high school degree or served with honor in the military and have not been convicted of felonies or other serious crimes. This group of young men and women were granted deferred action from deportation, but they must apply for this status, and it is renewable every two years. There are less than a million potential “dreamers” in this country and less than 300,000 in California. Uninsured dreamers are eligible in California for full scope Medi-Cal in California if income eligible, but not in most other states. Dreamers are not eligible for the Exchange/Covered California.

There has been lots of confusion about the recent CBO (Congressional Budget Office) analysis. The analysis was not that up to 2.5 million people would lose their jobs, but rather that up to 2.5 million people would voluntarily choose to adjust their work status because they would have the assurance of coverage through the Exchanges under the ACA. Some people may take early retirement. Some women or men may delay their return to work after childbirth. Some individuals will begin or join start-ups or become self-employed rather than continue in jobs they don’t like. This is the end of “job lock” where employees with pre-existing conditions for family members stayed in particular jobs because they could not get coverage for their families if they changed to a job for which they were better suited, but lacked an offer of health insurance.

Not yet widely discussed, but also relevant is the impact of the ACA on spouses who have separated, but not divorced due to the pre-existing medical condition of one spouse. Typically the spouse with coverage keeps coverage for the other spouse, who may have a pre-existing condition and cannot qualify for coverage on their own. Under the ACA, some spouses may choose to continue to keep this arrangement, while in other situations, each spouse will now choose to apply independently for their own coverage. These decisions will depend on the incomes, job coverage opportunities, and preferred coverage options for each spouse.

ITUP has now joined the Exchange for small employers, called SHOP, in California. The premiums were a bit less; the coverage was about the same, but the big advantage that our staff perceived and valued was a choice of plans and providers. Enrollment took a lot of patience and persistence; we’ll let you know how it works out.

There can be huge benefits for those who have been excluded or over-priced due to pre-existing condition exclusions, income, gender or age. For example, I was recently at dinner with some friends and neighbors who said they had their premiums reduced from $30,000 to about $8,000 annually in California’s Exchange. I’m not sure how this happened, but they were very happy.

In general, prices for a 60 year old can be no more three times higher than prices for a 20 year old. While this is the same price spread as already existed for individuals enrolled in Kaiser, it is a narrower spread than Blue Cross or Blue Shield previously used in California. So individuals with grandfathered coverage should carefully check whether they are getting better prices for their grandfathered coverage or for the new ACA coverage. The three to one ratio increases the cost of premiums for young people, particularly those up to the age 25. These young adults have a range of options: parental coverage, catastrophic coverage, Medi-Cal and premium assistance through Covered California that need to be checked out.

A couple of pieces of information you need to know about grandfathering and adoptive or faux grandfathering. “True” grandfathering applies to those insurance policies (primarily individual coverage) that had been purchased prior to the effective date on the ACA in March 2010. These policies may not cover all essential health benefits (like prescription drugs, mental health or maternity benefits), may have very high deductibles, may not be guaranteed issue or renewal regardless of your claims experience or your medical conditions, and may be gender rated. Some call them junk policies for those reasons but some of these policies may cost a lot less than the new policies available under and compliant with the ACA. About 5% of Californians have individual policies, and about half of them are grandfathered. True grandfathered policies will be ok as long as you keep paying your premiums.

Adoptive or faux grandfathering refers to individual policies purchased after the ACA was signed but before the full scope of insurance reforms started to take effect on January 1, 2014. The discussion in the media, in Congress and elsewhere has been about the individual policies purchased after the ACA was passed and whether they now have to be ACA compliant, and the argument was about President Obama’s statements “if you like it you can keep it” and whether that should apply to the adoptive or faux grandfathered policies. California has said “no”. Their reasoning is that half the subscribers of the adopted or faux grandfathered policies will get better coverage that costs less through Covered California; another quarter will pay more and get more coverage, and the last quarter will pay more and get greater consumer protections.

The Obama Administration initially decided to give states and the insurers they regulate an additional year (until 2015) to bring these policies into compliance with the ACA. Just this week the Obama administration gave states and the insurers an additional two years (2016) to bring these adopted or faux grandfathered policies into compliance with the ACA. While California has decided not to allow this second type of grandfathering, other states have decided to do so. So if you have one of these individual policies purchased after March 2010 that you think is better priced and better meets your needs, you can keep it for another couple of years in some states, but you need to upgrade to an ACA compliant policy if you are in a state like California.

Finally, if you have your children on your coverage up to age 26, you should carefully check and compare the benefits and premium assistance available in Covered California vs. their coverage through your policy. Be very careful as you consider this as their eligibility for premium assistance in the Exchanges is linked to whether you have claimed or will claim them as a dependent on your federal income taxes. You should carefully check with an agent/broker or navigator.


Hope all is well with each of you.