Author: Lucien Wulsin

Congratulations to Governor Brown, Senator Ricardo Lara and the State’s Legislative Leadership

Governor Jerry Brown signs $167 billion state budget with significantly increased funding for schools and $40 million for Medi-Cal coverage for immigrant children beginning by May 2016. Up to 170,000 children may qualify and the state will achieve near universal children’s coverage. Congratulations to Governor Brown, Senator Ricardo Lara and the state’s legislative leadership



ITUP Summary of Findings from the National Health Insurance Survey

The Centers for Disease Control, National Center for Health Statistics released its 2014 survey results on health insurance status for the nation.

Thirty-six million (11.5% of the nation’s residents) were uninsured at the time of their interview. The nation’s rate of uninsurance for adults fell from 22.3% in 2010 to 16.3% in 2014. The rate of uninsurance for young adults (19-25) fell from 33.9% in 2010 to 20.0% in 2014. The numbers of uninsured nationally fell from 48.6 million in 2010 to 36 million in 2014.

The percentages of uninsured ranged from highs of 21.5% in Texas and Oklahoma and 21.2% in Alaska to lows of 2.5% in Hawaii, 3.2% in Massachusetts and 3.3% in Washington D.C. California, which used to be competing with states like Texas and New Mexico for the highest uninsured rates, is now at 13.4%, just about the national average. Its uninsured rates for adults 18-64 fell from 24.4% in 2012 to 16.7% in 2014. Its uninsured rates for children fell from 6.7% in 2012 to 5.0% in 2014.

California’s rate of private insurance is 60.6%, below the national average of 63.6% and far below leading states like New Jersey (74.4%), Hawaii (72.8%) and Massachusetts (72.2%). Thirty-seven percent of those with private insurance are enrolled in high deductible health plans – a percentage that is increasing.

California’s rate of public insurance is 26.8%, a bit above the national average of 24.5% and far below the leaders such as Kentucky (36%), New Mexico (37.4%) and Washington DC (32.4%).

Between 2013 and 2014 as the ACA was implemented, the rates of uninsurance fell precipitously for the poor (39.3% to 32.3%) and near poor (28.5% to 30.9%), falling as well as for the non-poor (11.4% to 8.9%).

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States with state-based Exchanges like California had a sharper reduction in their uninsured rates between 2013 and 2014 than did those states with federal Exchanges, and they had strong growth in their rates of private insurance.

States with Medicaid expansions like California achieved sharper reductions in their uninsured rates (18.4% to 13.3%) between 2013 and 2014 than did those states, which refused to expand Medicaid (22.7% to 19.6%).

The results are that states which have resisted ACA implementation like Texas and Oklahoma have maintained their very high rates of uninsured while states like California and New Mexico (21% uninsured in 2012 to 14% uninsured in 2014) that have enthusiastically implemented it have seen large reductions in their rates of uninsured.





ITUP’s Summary of “Coverage Expansions and the Remaining Uninsured”

Coverage Expansions and the Remaining Uninsured: a Look at California During Year One of ACA Implementation (Kaiser Family Foundation, May 2015) is an excellent overview of the impacts of the Medicaid (Medi-Cal) and Covered California expansions. This is the report on Year 1.

The highlights are as follows:

  • The newly insured and the remaining uninsured resemble each other in age, income and health status. They differ primarily on the basis of their immigration status.
  • The Medi-Cal and Covered California enrolled populations are far more ethnically diverse than those with private insurance.
  • Covered California provides a significant source of coverage for working families not offered coverage at the workplace – 75% are workers and families.
  • One fifth of the newly insured reported changing their source of care, primarily for convenience – closer to home or work.
  • The newly insured are now far more likely to have a regular source of care than the uninsured, but still less so than the previously insured.
  • Both Medi-Cal and Covered California enrollees use clinics as a source of care, but far higher percentages (44%) of Coverage California enrollees use private doctors. Fifty-seven percent of those with Medi-Cal use clinics; 32% of those with Covered California use clinics, and 15% of those with other private insurance.
  • For the uninsured, the principal reason for choosing their source of care was affordability; for the newly insured it was convenience, and for the previously insured it was pre-existing relationship with their doctor.
  • Providers were more likely to refuse to treat Covered California enrollees (13%) than either Medi-Cal (8%) or other privately insured (3%) patients.
  • Price was the most important determinant (37%) for Covered California enrollees in selecting a plan.
  • Thirty-five percent of the newly insured had a hard time understanding their plan’s coverage as compared to 20% of the already insured.
  • Forty-four percent of newly insured Covered California enrollees reported difficulty paying their premiums as opposed to 1/4th of adults with other coverage (i.e. employers), but they reported far lower rates of difficulty paying their medical bills and less worry about their ability to access and pay for their medical care than did the uninsured.
  • Most (64%) of the remaining uninsured did not try to apply for coverage because they believed it would be too expensive. A third did apply but were told they were ineligible (38%) or decided it was too expensive (21%).
  • Forty-four percent of the remaining uninsured identified cost as the reason they were uninsured; 3% said it was because they opposed the ACA or preferred to pay the penalty.
  • Half of the remaining uninsured indicated that they planned to get coverage in 2015, — through work (7%), through Covered California (3%) or Medi-Cal (8%), but most (28%) simply weren’t sure.
  • The remaining uninsured are less likely to report they have an ongoing condition, less likely to be taking medication, but more likely to report that they are in fair to poor health than the newly insured or already insured.

This summary can be downloaded here.

Care, Coverage and Financing for Southern California’s Remaining Uninsured

In this paper we look at six Southern California counties, their implementation of the Affordable Care Act and care and financing for the remaining uninsured in the local safety nets. The landscape has changed swiftly and dramatically from large numbers of uninsured seeking care in over-burdened and under-financed county health systems to large numbers of newly insured seeking care through Medi-Cal managed care plans, whose enrollments and responsibilities have grown very quickly.

We look at the following key areas and make a set of recommendations at the federal, state, local, and where applicable, employer level:

  1. Who are the Remaining Uninsured, and how is that changing?
  2. What do the safety net delivery systems look like by county, and how are they evolving?
  3. How are these systems financed, and how is that changing?
  4. What are the opportunities and perils in care for the remaining uninsured, and how are local safety nets responding?

Read Care, Coverage and Financing for Southern California’s Remaining Uninsured here.

Access the individual county reports here: San Diego , Orange CountyLos AngelesKern, and Inland Empire.


ITUP’s Summary of The Kaiser Health Tracking Poll Findings

Today the Kaiser Family Foundation released its Kaiser Health Tracking Poll on public views of the Affordable Care Act (ACA).  Some of the findings include:

    • About 43% like the ACA and 42% dislike it. 75% of Republicans dislike it and 70% of Democrats like it. Independents are evenly split.
    • Only 8% knew the ACA is costing less than projected.
    • 19% say the law has helped them and 22% say it hurt them.
    • 29% say the law should be repealed; 46% say it should be expanded or implemented as is, and 12% say it should be scaled back,
    • Priorities for the President and Congress
      • Making high cost drugs for chronic conditions more affordable (76%)
      • Reduce the costs of prescription drugs (60%)
      • Protecting people from high provider prices (56%)
      • Assuring sufficient provider networks (55%)
      • Transparency of provider prices (54%)
      • Transparency of provider quality (54%)
      • Improving eligibility rules so more people can be helped (50%)
      • Requiring all states to expand their Medicaid programs (50%)
      • Repealing the employer mandate (39%)
      • Repealing the individual mandate (37%)
      • Repealing the entire law (36%)
      • Reducing the number of people who get help (28%)
    • Only about 30% reported seeing any information comparing plan and provider prices and only 20% have seen this information on plan and provider quality
    • 2/3rds say it is difficult to find out what medical care will cost
    • Most (73%) of the uninsured do not believe they can pay for usual medical costs and nearly all (92%) do not believe they can pay for the costs of a major illness
    • A third of the insured say it is difficult to pay their deductible, 28% say it is difficult to pay their premiums and a quarter say it is difficult to pay their copays
    • A quarter of the insured believe health costs have gone up a lot, and 60-70% believe their premiums and out of pocket have held steady or gone up a little.

Post-ACA, public opinion continues to be divided.

King v. Burwell in the U.S. Supreme Court

The case is about individuals’ refundable tax credits that help pay for individuals’ health insurance in the 34 (37) states whose Exchanges are administered by the federal Department of Health and Human Services. There are about 8.6 million subscribers now enrolled – ranging from about 1.6 million in Florida and 1.2 million in Texas to 18,000 in South Dakota and 21,000 in Alaska who could be impacted. This does not apply to states like California or New York or Vermont or Washington State, which decided to run their own Exchanges.

The petitioners, 4 residents[1] of the Commonwealth of Virginia, maintain that the ACA does not authorize individual refundable tax credits in states unless the state decided to operate their own state Exchange, rather than deferring it to HHS. Health coverage for 385,000 fellow Virginians would be impacted. The District Court and the 4th Circuit Court of Appeals decided that the ACA did authorize refundable tax credits to all individuals regardless of which option their state chose. The Supreme Court is now about to hear oral argument on March 4. The Supreme Court’s decision will apply to at least 8.6 million individuals (and growing) in all 34 (or 37) states with HHS operated Exchanges – not California.

Here is a little background on the arguments. The Affordable Care Act/ObamaCare requires all Americans to have basic health coverage — the lowest cost bronze coverage pays at least 60% of the costs of their health care. It requires all insurers in the individual and small employer markets to sell coverage regardless of an individual’s health status. It helps individuals pay for their coverage through a refundable tax credit that is graduated based on an individual’s ability to afford coverage – i.e. those with the lower incomes pay less and those with higher incomes pay more and the tax credits pay the difference.[2] These are referred to as the three legs of the stool of the ACA (affordability, availability and personal responsibility). The tax credits are paid by the US Treasury to the private health plan that the individual selects within the Exchange – in other words these are individual tax credits for individual health insurance purchased through Exchanges.[3]

The ACA permits states to choose to operate their own Exchange, or have the federal government (HHS) operate their Exchange consistent with the laws governing insurance in the individual’s state of residence. The federal regulations from the IRS (Treasury) and HHS (Health and Human Services) give states four options: run your own Exchange, run a regional Exchange with several other states, run a hybrid Exchange where the state performs some functions and the federal government others functions, or have the federal government (HHS) run it for you. Many states decided to let HHS run their Exchanges – an option that California strongly considered and rejected.

The IRS rule that is being challenged (26 C.F.R. § 1.36B-2(a)(1)[4] provides individual federal tax credits regardless of which approach a state took. The petitioners say that under the ACA the credits are only available to individuals in states that operate their own Exchange, and the IRS rules should be struck down as a violation of the ACA. Their argument is based on their reading of 26 USC 36B (tax credits) and Sections 1311 (state operated Exchanges) and 1321 (state Exchanges operated by HHS) of the Affordable Care Act. The ACA subsection of 26 USC 36B[5] in question is cross-referenced back to ACA §1311 and makes no reference to §1321. The federal government (the respondent) defends its rule by pointing out that §1321 is a subsidiary of §1311 (i.e. the federal government is operating the Exchange for the state in accordance with state insurance laws and the state’s Medicaid rules), that the ACA from start to finish is about providing affordable coverage for every American, and that administrative rule making is to be given wide deference by the courts.

The Fourth Circuit in King v. Burwell held that in reading the whole Act and the legislative history Congress clearly intended the tax credits to be available nationwide regardless of whether an individual purchased coverage through state or HHS Exchanges, and the IRS rule was fully consistent with the ACA.

You may find the briefs of the Petitioners and Respondents compelling reading if you are a lawyer, or have great fondness for legal writing. See I found the Petitioner’s efforts to come up with an argument to explain why Congress intended to disadvantage individuals in states with HHS run Exchanges and then didn’t tell anyone about it to be the most entertaining portion of the briefs. Since there was not a word of contemporary legislative history to that effect, they created hypothetical back room deal making to encourage state-operated Exchanges and punish the citizens of states that chose federally operated Exchanges.

This is a Hail Mary pass to undo the ACA at a time when it appears to be working increasingly well – more people are getting coverage, the electronic enrollment is functioning, and individual insurance market premiums are stable. However, the Supreme Court took this case on certiorari (i.e. it was discretionary) indicating that at least 4 Justices thought it had some merit and wanted to hear it. A parallel case, Halbig v. Burwell, Number 14-5018 (DC Circuit, July 21, 2014) is pending before an en banc panel of the DC Circuit, which had vacated the 2-1 decision striking down the IRS rule.

Many of the ACA’s Congressional opponents have been asking the Administration what it will do to preserve coverage for the 8+ million residents in states with federal Exchanges and assure the viability of their individual insurance markets. To date, the Administration has maintained it has no back-up plans, and it expects the IRS rule-making to be sustained.

Others have pointed to the market and human chaos that will ensue if the IRS rule is struck down – removing one of the key pillars (affordability) of the Affordable Care Act in these states. See Amicus Brief of the Commonwealth of Virginia and many other states including Mississippi, North Carolina, Iowa, New Mexico, Maine and North Dakota, which selected HHS to operate their state’s Exchanges.

Essentially, this was a case generated by two distinguished scholars affiliated with the Cato Institute about a possible drafting glitch in the ACA.[6] It’s surprising that it has gone to the Supreme Court given the undisputed legislative history of the ACA to cover every American, but nine justices will yet again have an opportunity to go down in the history books ruling for or against coverage for every American.



[1] Petitioners claim they want to buy catastrophic coverage rather than bronze coverage and their eligibility for tax credits/premium assistance disqualifies them from purchasing catastrophic coverage.

[2] Because individual health insurance premiums are age rated and family rated (i.e. you pay substantially higher premiums in individual markets as you age or have more family members), those who are older and with larger families get more help (bigger tax credits) than individuals (with equal incomes) who are younger and have fewer family members.

[3] Employers and employees have a different system of tax subsidies – pre-tax purchasing. For the self-employed a tax deduction is also available.


[5] (

[6] Jonathan H. Adler & Michael F. Cannon, Taxation Without Representation: The Illegal IRS Rule To Expand Tax Credits Under the PPACA, 23 Health Matrix 119, 123 (2013)


Mom, Dad, I’m 26 and I forgot to enroll in Covered California, “I’m so sorry, but what do I do now”?

If you just started preparing your taxes for that refund you were hoping for and you just now learned that there is a tax penalty for not enrolling, you can apply from now until April 30 at Covered California.

If your income is less than $16,100 for an individual, you may apply for Medi-Cal at any time. There is no limited open enrollment period for Medi-Cal.

If you got married, had a child, lost health coverage, moved to another county or state, lost your job, your income changed a lot so you now qualify for help paying your premiums, you became a citizen or a new legal permanent resident or you had a really, really good life changing excuse, you can qualify for “special enrollment”, but you have to do it in 60 days of the life event.

Mom, how much is that tax penalty, maybe I should just pay it. For last year (2014), it was $95 per person or 1% of your annual income, whichever is more. For this year (2015), it will be $325 per person or 2% of your annual income, whichever is higher. For next year, it goes up to the higher of $650 or 2.5% of your annual income. Just don’t ask your Dad to pay your tax penalties.

ITUP Draft summary of the §1115 Waiver Concepts

ITUP Draft Summary of the State’s §1115 Waiver Concepts, dated 2/11/15

The request is for $15-20 billion in increased FFP over 5 years or $3-4 billion a year in federal and state shared savings. The state and federal government would agree on a per member per month cost amount that would be allocated to the state to support the delivery system reforms envisaged. It appears that the state would make the enhanced pmpm available to local managed care organizations who would in turn be responsible to achieve the goals of the waiver.

Download the full draft summary here: Summary of the State’s §1115 Waiver Concepts

If You are Uninsured…

If You are Uninsured or Have Private Individual Insurance, Ten Good Reasons to Enroll before February 15, 2015

— the Deadline for Covered California –

  1. In case you get sick — measles, mumps, the flu, chicken pox or any other infectious disease.
  2. In case you get hurt — driving, fixing the house, at a rowdy Super Bowl party, exercising or just walking the dog.
  3. In case you get pregnant.
  4. In case you get really sick – cancer, heart attack, depression or stroke.
  5. In case you are not a billionaire and cannot afford to pay for all your medical bills out of your own pocket.
  6. To make your mom, dad, grandma, kids or siblings happy that you’ll be ok if something bad happens. To make your partner happy for Valentine’s Day.
  7. To get preventive care or a check up so you stay healthy.
  8. Because the next open enrollment is not until November 15, 2015 and you cannot just buy individual coverage any time you need it to pay your bills.
  9. Because you are likely to qualify for some help paying your monthly premiums and/or out of pocket costs (incomes up to $46,680 for an individual or $95,400 for a family of four).
  10. Because you don’t want to pay the penalty for being uninsured in 2015 – 2% of your income or $295 per year, whichever is more.



In Loving Memory

The 19th ITUP conference is dedicated in loving memory to Peter Harbage.