Author: Lucien Wulsin

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.


ITUP Goes SHOP-ping

ITUP just switched to SHOP coverage through Covered California. In December 2013, we began to assess whether SHOP would be a good fit for our employees. The SHOP gold tier of coverage was about the same coverage as we already had, and it would cost us less per capita.

We next asked whether our staff wanted a choice of plans and providers; their answer was a strong “yes”. In fact that “yes” was so strong that some indicated they might drop their “other” coverage – a savings for them, a cost for ITUP.

We needed to assess whether and in which plans, our staff’s preferred physicians participated. This was not an easy task, as it requires the employee to check out the provider directory of each of the plans offered through SHOP. In some cases their personal physicians were not sure they wanted to participate in SHOP plans, whether their IPA was participating, and in which SHOP plans they were participating. So this requires some research on the plan’s web sites.

SHOP gives a choice of PPOs and HMOs and the prices vary by plan. At ITUP, we decided to tie the ITUP contribution to the mid-priced plan. Employees choosing the more expensive plan would pay the extra cost and employees choosing the less expensive plan receive the incremental savings.

It takes a bit of time and paperwork, some patience and persistence, but the net for ITUP was a savings in per capita costs and staff more satisfied with their health coverage. This is the first in a series of ITUP’s experience SHOP-ping.

For more information on the SHOP, see Covered California’s website. Small business with up to 50 full time employees can participate. At this time, enrollment is by paper application, through licensed brokers, or through the SHOP hotline.

Screenshot 2014-02-28 15.07.20

Overview of Governor Brown’s Proposed Health Budget for 2014-2015

Download the full report here: Overview of Proposed Health Budget Overview of Proposed Health Budget.pdf

The state budget expects to spend $155 billion in State Funds next year. Roughly $106 billion is from the state General Fund, $44 billion from Special Fund Programs and $4 billion from bond expenditures.

The state’s revenue comes from personal income taxes, sales taxes, corporation taxes, car taxes, alcohol taxes and tobacco taxes. The big growth in revenue is from the capital gains component of the personal income tax due to the growth in stock market values, while many other taxes such as gas taxes, alcohol, tobacco, corporate and insurance taxes are flat or declining.

Income tax revenues are up 8.5%. Sales taxes increased by 5.7%. $9.5 billion of the $37 billion in sales tax revenues are dedicated to county realignment funding for mental health, social services, health, public safety and transportation. State taxes amount to 6.98% of personal income – a figure significantly lower than the late 70’s, mid 90’s and the middle of the last decade.

The Governor is proposing to completely pay off the state’s “wall of debt” by 2017-18, which peaked at $34.7 billion in 2010-11. He is also proposing to pay off the state’s economic recovery bonds and deposit $1.6 billion in the state’s Rainy Day Fund. Most of the unanticipated growth in state capital gains revenues is dedicated to paying down the debt and funding the Rainy Day Fund.

The state General Fund devotes $45.2 billion to K-12 education (9.5% growth), $28.8 billion to Health and Human Services (1.6% growth), $12.3 billion to higher education (10.8% growth), and $9.6 billion to corrections (2.1% growth).

Budget Proposed by Governor

Today Governor Brown released a summary of his proposed 2014-15 state budget. The budget for Medi-Cal is projected at $73 billion and the numbers of enrollees would be 10.1 million, reflecting the launch of the Affordable Care Act. This is an increase from $66 billion in Medi-Cal spending and 9.2 million enrollees last year.

Some of the interesting proposals:

1)   Full implementation of the Medicaid expansion

2)   Healthy Families shift to Medi-Cal

3)   AIM shift to Department of Health Care Services

4)   Full scope Medi-Cal for pregnant women with incomes under 100% of FPL

5)   Premium assistance and wrap-around coverage for eligible pregnant women through Covered California

6)   Retroactive provider rate cuts not implemented

7)   10% prospective rate cuts implemented

8)   Primary care rate increase through the end of 2014

9)   Pediatric dental and vision services outreach for children 0-3

10) Coordinated care initiative begins April 1, 2014

11)  Waiver to better integrate and coordinate mental health and substance abuse treatments

12)  MRMIB is eliminated and shifted to the Department of Health Care Services.

The full summary is available here.

Looking Forward

In this set of papers, we are trying to set out the options, possibilities and some recommendations for the evolution of California’s health care system for the rest of this decade. We must clarify where we are going in order to make the best decisions possible on all these issues facing California’s implementation of the Affordable Care Act (ACA). To do so, we will need a coherent policy direction, not a series of ad hoc decisions.

These papers will be released in installments throughout the following weeks leading up to ITUP’s 18th Annual Conference. You can download each piece by clicking on the links below.


Challenges for California Looking Forward
Looking Forward - Part 1 Looking Forward - Part 1.pdf

This introductory piece opens by highlighting key decision points that California will face in the near future. It goes on to briefly describe California’s current model of health coverage, and goes over the changes to the health care system brought on by the Affordable Care Act. The paper concludes by presenting five options for more thorough reforms in California, and our recommendations.


Potential Models for the Evolution of Employment Based Coverage
Looking Forward - Part 2 Looking Forward - Part 2.pdf

The second installment begins with a brief overview of the current state of employment-based coverage in California, then focuses primarily on potential models of evolution for employment-based coverage, and concludes with ITUP’s recommendations going forward.


Financing Health Coverage in California
Looking Forward - Part 3 Looking Forward - Part 3.pdf

The third part of the series takes a comprehensive look at how health care is financed in the United States. It briefly goes over the different types of health coverage (e.g., employer-based, individual market, Medicaid, Medicare) and how they are currently financed. The paper also includes how the ACA impacts these different areas of coverage, and ITUP’s policy recommendations for how California can improve the financing of the different programs.


Payment and Delivery System Reforms
Looking Forward - Part 4 Looking Forward - Part 4.pdf

The U.S. health care system has two major problems: high prices and subpar outcomes. This fourth installment looks at different ways to restructure the payment and delivery system to simultaneously drive done costs and improve results in the American health system.


The Changing Roles of Government(s)
Looking Forward - Part 5 Looking Forward - Part 5.pdf

The penultimate installment of the series looks at the evolving roles of the federal, state, and county governments in the health care system under the ACA, and ITUP’s recommendations for what each can do in the near future to continue to improve care and coverage to Californians.


Program Evolutions
Looking Forward - Part 6 Looking Forward - Part 6.pdf

ITUP’s Looking Forward series concludes with a look at how Medi-Cal, Covered California, Providers, and other programs must evolve for California to have an effective and sustainable health care system.


2014: Tomorrow is Here

We hope you had wonderful holidays and New Year celebrations.

The rollout of the Affordable Care Act in California has gone well, with enrollment for the first three months, reported to top one and a half million in California. California has had the advantages of a three-year head start in Medicaid enrollment, supportive Governors and legislature and some mix of good luck and terrific management at Covered California and the Department of Health Care Services.

ITUP has been working extensively on the ground with local organizations that can help use the Affordable Care Act’s improvements in primary care, mental health and substance abuse treatments to help their clients turn their lives around. We think these primary care and behavioral health investments will have huge payoffs in the lives of individuals, their families and the communities they live in. We hope you will share these stories widely as they are immensely important to advance the public’s understanding of these positive steps.

ITUP’s staff spent many months teaching and training on the ACA before the rollout of the coverage expansions. The big surprises from our training were the level of misinformation even among well-informed members of the public and the incredible complexity of people’s questions. I certainly thought we knew the ACA reasonably well, but the questions kept sending us back to the federal rules to figure out the right answers. I have far greater empathy for the confusion surrounding the federal roll out and the terrific work that community organizations, clinics, counties, providers and brokers did here in California. The interfaces of the ACA’s new coverage with traditional Medicaid, with employer-sponsored insurance, with immigration policy, with all the tax implications and with the mixture of relationships that comprise the modern California family are just really complex.

Most of the negative commentary we heard was from people with insurance who wanted the ACA to go further than it does in making their own coverage more affordable. They wanted to get some help paying their premiums even though they had coverage through their employers or they wanted help paying individual insurance premiums even though their incomes were too high to qualify for premium assistance under ObamaCare.

The ACA will need improvements to help particular groups of individuals and families — people with larger families whose premiums are three times those of an individual, individuals with incomes just above the federal subsidy level (about $46,000 for an individual or $95,000 for a family of four) who must pay full freight, or individuals in their 60’s whose premiums are three times as high as for younger folk of comparable income. This is going to require some bi-partisanship in DC, which may be a while in coming.

My sense is that those states which were on the fence are now seeing that the ACA is here to stay and beginning to seek some accommodation with the federal government to expand Medicaid with a twist to adjust the programs to their particular state’s political and economic framework. Ohio, Iowa and Arkansas are among the leaders. While it may not happen in Texas or Oklahoma any time soon, I expect Medicaid expansions will start to go forward in states from Maine, and New Hampshire, to Missouri, Virginia or Pennsylvania depending on their assessments of the success in the neighboring states. Your stories of what is happening here in California will be important to the citizens of other states throughout the country.

With much appreciation for all of you, for everything you do, and best wishes for the New Year. Let’s keep building affordable coverage for every Californian.


ITUP Draft Recommendations for the San Francisco Universal Health Council

Below are ITUP’s suggestions to the San Francisco Universal Health Council on revising the San Francisco Health Care Security ordinance’s employer health spending obligations in light of the passage of the Affordable Care Act.

Download the complete document here: San Francisco Ordinance Recommendations San Francisco Ordinance Recommendations.pdf


ITUP’s recommendations are summarized as follows:

For those employers with over 50 FTE employees:

1.     For full time (over 30 hours) employees where the employer offers coverage, there should be a “safe harbor” if the offer complies with the ACA.

2.     For full time employees where the employer does not offer coverage, the San Francisco ordinance should apply and the employer can offset any “ACA” penalties that it paid.

3.     For part time employees where the employer offers them coverage, there should be a safe harbor if the offer complies with the ACA.

4.     For part time employees where their employer does not offer them coverage, the San Francisco ordinance should apply.


For those employers with under 50 employees:

5.     Where the small employer offers coverage for full time employees, that is ACA compliant, there should be a safe harbor.

6.     Where the small employer does not offer coverage for full time employees, the San Francisco ordinance should apply.

7.     Where the small employer offers coverage for part time employees, that is ACA compliant, there should be a safe harbor.

8.     Where the small employer does not offer coverage for part time employees, the San Francisco ordinance should apply.


Recommended priorities for the funding available under the Ordinance.

·       The Medical Resource Account (MRA) program would be rechristened as the San Francisco Premium Assistance program.

·       The MRA would help pay for Healthy San Francisco for employed individuals not eligible for Covered California or full scope Medi-Cal.

·       The MRA program funding would help pay Covered California premiums for employed individuals eligible for that program at employee option.

·       The MRA would be available to upgrade coverage from bronze or catastrophic to silver through Covered California at the employee’s option.

Understanding Cancellations of Individual Insurance Policies

Background on ACA Reforms

There are three different kinds of very important upgrades to individual policies under the Affordable Care Act: 1) underwriting, 2) ten essential health benefits, and 3) out of pocket rules.[1]

Underwriting refers to guaranteed issue and renewal and pre-existing condition exclusions. Underwriting also refers to geographic rating, age rating and family size rating. The ACA requires that insurers sell to all comers during open enrollment with no pre-existing condition exclusions. Carriers cannot terminate your coverage, raise your rates or cancel coverage because you get sick or injured and require extensive treatments. Premiums can vary based on age, geography and family size, but not on gender or health status.

The ten essential health benefits refer to the minimum benefits, which are now becoming available to every American. These include hospitals, doctors, emergencies, prescription medications, behavioral health, maternity care, prevention, rehabilitation and child dental and vision services.

Out of pocket refers to copays, deductibles, yearly and lifetime caps, and annual out of pocket maximums for patients and consumers. The ACA eliminates annual and lifetime caps, authorizes plans that will pay between 60% and 90% of expected medical expenses as well as catastrophic coverage for the young and for those with financial hardships, and caps individuals’ annual out of pocket maximums at $6350 for an individual and $12,700 for a family.

“Grandfathering” refers to individual and small employer plans purchased prior to March 23, 2010. Grandfathering allows individuals to keep plans with pre-existing condition exclusions and rates that vary based on gender or health status, or which lack the ten minimum benefits or have exposure to high out pocket costs.

 Insurance Cancellations

Insurers have sent cancellation notices and the opportunity to enroll in ACA compliant plans to their individual subscribers whose coverage was both substandard and not grandfathered. For some this involved “sticker shock” as their existing plans were very substandard. This was met with a firestorm of opposition from individuals whose plans were being cancelled and some of whose premiums were about to be increased. Some were even unaware that their premiums were actually being decreased and their coverage improved under the ACA.

 The President’s “Fix”

The President has now said insurers can retract those cancellations and individuals and small employers can keep substandard coverage for at least the year 2014 provided the individual plans and the individual states agree.[2] Republicans in the House have introduced legislation that allows individuals to keep all existing policies and insurers to continue to sell sub-standard plans. This has passed the House.[3] A Senate measure by Senator Mary Landrieu codifies the President’s actions.[4]

In California

The State Insurance Commissioner has stated that insurance companies that do not participate in Covered California will be allowed to reinstate cancelled policies. They may or may not do so, this is up to the individual insurance carriers. At this time, no decision has been made about companies that do participate in Covered California. Participating insurers were required to cancel all non-grandfathered policies that existed outside of Covered California. The Exchange is expected to announce their response to the President’s change this week.


The problem with these approaches is that they establish two separate risk pools in the individual market.

We are skeptical that is a good idea or even a workable one for more than a short time frame. The old substandard policies that an individual may well prefer today will over time become a stagnant risk pool; risks will rise and premiums will follow suit. Individuals will exit from their old policies into the new ACA covered plans during open enrollment periods. This could be an acceptable transition over a year or two, but the confusion factor will be substantial for individuals with substandard policies who need valuable health care and cannot get it under their old policy and want a new one. The House bill avoids the stagnant risk pool problem by allowing new subscribers to purchase the old substandard coverage policies; this has the potential to turn the ACA’s new guaranteed issue pool into a bad risk pool – a far worse scenario.

There is an enormous amount of misinformation, misunderstanding and obfuscation in the public discussions of this issue. Questions are asked about the ten essential benefits, which we will try to answer.

  • Why should I have maternity coverage when I’m a 55 year old couple past child bearing years?
  • Or a 24 year old unmarried male?
  • Or why do I need coverage for rehabilitation or for behavioral health?
  • Why should I have coverage for children’s dental and vision?

All of these benefits are in the ten essential health benefits, but they have very different values depending on your age. For example children’s dental and vision are a large part of the value/premium for children, but they represent $0 value and no part of the premium for adults.

Likewise maternity benefits make up close to $0 value for 60 year olds past the child bearing ages, but a very large share of the premium for men and women in their 20s and 30s. While cancers, heart attacks, chronic disease and strokes make up a very high share of the premiums for those 50 and above and a very small share for those in their 20s. There appears to be a complete misunderstanding of the equal importance of young men in the reproduction of the species, which typically involves the participation of both men and women.

If you have broken a leg, or hip, suffered brain trauma, been in a bad car accident, been injured in sports, been injured in the wars, had a stroke or heart attack, you understand and can vouch for the importance of the rehabilitation benefit. One may hope to never need that particular benefit, but if you are badly injured, rehabilitation is both very expensive and absolutely vital to returning as much of independent functioning in the essential activities of daily living as possible.

Mental illness affects one in five Americans during their lifetimes; it affects the young and the old, men and women, and it often arises unexpected out of unforeseen life traumas.

Because premiums under the ACA are age rated, you are paying for the benefits that people in your age cohort need. Ultimately, you do not always know what health care services you will need or when you will need them, thus it’s necessary to have coverage for all important services, should you need that benefit.

What should be done to help those with premium increases and no premium assistance under the ACA?

First for those in the individual markets who are having difficulty affording the upgraded benefits, there should be ready availability of catastrophic coverage. Under the ACA, this is available for all with financial hardship or anyone under the age 30. Financial hardship is defined as the premiums for the lowest cost bronze coverage exceeds 8% of an individual’s income. This ought to be readily available through Covered California and the Internet application process.

Caution is needed as none of the premium assistance or out of pocket assistance available through the ACA is available for individuals who choose catastrophic plans. This fix could be done with ease by the state and federal governments. Second, individuals whose premiums for the lowest cost bronze plans exceed 8% of their income should qualify for a tax deduction. This is not as valuable as the refundable tax credits/premium assistance under the ACA, but it would bring those with individual coverage more on par in terms of favorable tax status with those employees with employment based coverage. This would require a bi-partisan agreement in Congress.

[1] See Wulsin, Understanding the ACA’s Individual Market Reforms (ITUP, November 2013) at and Coleman, Individual Insurance Cancellation Letters: Frequently Asked Questions (November 12, 2013) at[2]
[3] Pear, House Approves Bill That Allows Policy Renewals, New York Times November 15, 2013) at

[4] Ibid.