Author: Lucien Wulsin

California Counties’ LIHP Enrollment Nears 650,000 and Primary Care Networks in Place as California’s Safety Nets Prepare for January 1, 2014 Transition to the Affordable Care Act

California counties are leading the state’s head start on health reform enrollment. As of August 2013, the latest available data, 648,508 individuals are enrolled in LIHPs and ready for auto-enrollment in the ACA coverage expansions on January 1, 2014. 624,403 individuals are Medi-Cal eligible and 24,105 individuals are Covered California eligible.

Los Angeles County has enrolled nearly 294,000 individuals, followed by Alameda with nearly 49,000, Orange with 45,000 and San Diego totaling 40,000. The small rural CMSP counties have over 63,000 individuals enrolled. See

News headlines of slow enrollment are missing the fact that ACA enrollment is not limited to the Exchange web sites, but comes in many ways in addition to the recently opened online applications. Most (53 of 58) California counties have been preparing their enrollment since 2010 and ten California counties have been enrolling their residents in this precedent setting program since 2008.

Another component of this story being missed is that all enrollees have an assigned primary care physician, and the program already has implemented many of the most critical delivery system reforms that are able to dramatically reduce the use of hospital emergency rooms and avoidable hospitalizations. Pourat, N. et al, Safety Net Delivery Redesign: Innovations in the Low Income Health Program (UCLA Center for Health Policy Research, November 2013) at

Primary Care Rate Increases Begin

The Affordable Care Act requires that states increase their reimbursement rates for primary care providers to Medicare levels. In California, this should approximately double the reimbursement rates for primary care. It applies to both fee-for-service and managed care services and payments for codes E&M 99201-99499 and Vaccine Administration 94060-1 and 90471-4.
CMS has approved California’s proposed implementation, and the first payments are due to go out this week. Reimbursements must be retroactive to January 1, 2013. A 100% federal match is available through the end of 2014.
See California Department of Health Care Services, ACA Increases Medicaid Payment for Primary care Physicians at and CMA Alert #2270 (November 4, 2013)

Understanding the ACA’s Individual Market Reforms

There has been much in the news lately about the impacts of the Affordable Care Act’s reforms on the individual market. This document summarizes the reforms and their impacts for those who are interested.

The ACA’s reforms of the individual market include the following: guaranteed issue and renewal, no more pre-existing condition exclusions, rating reforms, minimum essential benefits, tiers of coverage, Exchanges, refundable tax credits, reference plans, and individual responsibility. We will discuss them in that order interspersed with several commonly asked questions.

Download the full report: Understanding the ACA's Individual Market Reforms Understanding the ACA's Individual Market Reforms.pdf

Thoughts in the Aftermath of the Government Shutdown and Budget Stand-Off

Senator Cruz and the Tea Party appear to have miscalculated in several ways. First, they thought that the President and Senate Democratic leadership would blink and agree to repeal or gut the Affordable Care Act. Second, they believed that the American people would rally to their side. Third, they believed that all Republicans would stand solid in support of this quest to repeal the Affordable Care Act in the face of the potential for a national and global financial meltdown.

The public polling shows ever stronger public support for implementing the ACA and fixing the computer glitches along with the other important changes needed to make implementation successful. As people who are uninsured or with individual coverage get enrolled in Covered California and appreciate the prices and access to care under this new coverage opportunity, support will continue to build. If health costs and insurance premiums skyrocket, support will evaporate.

Now is the time to do several things: enroll all the eligible, implement the payment and delivery system reforms needed to slow the rise in spending, improve the quality and outcomes of care, educate Californians about the multiple facets of improvement in health care under the ACA, and design and agree on the next steps of reform here in California and nationally.

The medical equipment manufacturers and suppliers, unions and others were right on the spot with Democratic and Republican lawmakers trying to repeal the aspects of the comprehensive reforms in Affordable Care Act, which impacted them. Those favoring comprehensive reform were ardent in defending the ACA, yet lacked a game plan and proposals to fix the law and move reforms to the next level. In part because the roll out is a work in very early progress, it is hard to know what to fix beyond computers. Additionally, it appears to be a fool’s errand to find bi-partisan agreements when the Tea Party and its adherents are fixated on repeal. But beginning now and before January 1, 2014, we all need to be ready.

Based on the trainings, workgroups, research, and community forums we have conducted, I am going to suggest the following and would love to hear your thoughts and recommendations.

  1. Design payment reforms that reward provider efficiency, improved outcomes and excellent quality and penalize the opposite
  2. Promote cultures of coverage, prevention and wellness
  3. Fix the affordability of employment based coverage for low, moderate and middle income families
  4. Integrate behavioral and physical health coverage and care
  5. Design and finance integrated safety net care for the remaining uninsured and replace program silos with integrated systems of care.

We must all find common ground to effectively fix the implementation glitches as they appear and build bi-partisan agreement on the next steps of reform.

Covered California is Showing Extraordinary Levels of Consumer Interest and Important Improvements in Service

Nearly 1.6 million unique users checked out the web site, Close to 95,000 applications were started since its opening on Oct. 1, 2013. Approximately 105,000 calls were made to its Service Center, with average phone wait times now down to less than 2 minutes.

Weekly Report Oct 1-5 Oct. 6-12 Cumulative


Unique visits to 986,705 602,539 1,589,244
Total call volume to the Service Center 59,003 45,785 104,788
Average wait time 15:08* 1:55  
Average handling time 16:48 14:36  


The training and deployment of enrollment assisters from community agencies, agents and brokers and county eligibility staff is proceeding quickly with many more assisters in the training and certification pipeline.


Enrollment Assistance Program Certified Oct. 1-12 Certification in Progress


Certified Enrollment Counselors 279 3,824
Certified Insurance Agents** 1,295 3,382 
County Eligibility Workers 5,287 5,421


Source: (October 15, 2013)

Understanding the Affordable Care Act’s Implementation in California – A Small Business Perspective

For small employers in California, the Affordable Care Act is fairly simple. There is no mandate; there is a new purchasing pool, there are new opportunities for coverage of spouses, children, laid off workers, new hires. There are small business tax credits and some improvements in the rules governing underwriting.

The California legislature had already enacted many of the ACA’s reforms for small employers in 1992, and many have stood the test of time. The most interesting point in the ACA for small employers is the interface with Covered California/the Exchange/the Marketplace with coverage offered through employees.


Purchasing Pools

The Affordable Care Act created a purchasing pool, the Small Business Heath Options Program (SHOP), for small employers who wish to use it to offer coverage for their employees. The concept is to give small employers the same broader choices of plans, benefits and provider networks as larger employers.

Under California’s implementation of the SHOP, small business can choose the level of coverage (bronze, silver, gold or platinum) for their employees and the amount of premium (from 60% to 100% of the premium) the employer wishes to contribute. Employers choose a reference plan and price (e.g. gold coverage for the Kaiser plan).

The employees can choose among several different offerings from Kaiser, Health Net and Blue Shield. Employees would pay 100% of the extra cost of choosing the more expensive plans than the employer selected reference plan and would get 100% of the savings from choosing the less expensive plans. The prices, coverage and provider networks of Covered California plans can be reviewed on the web site

Anthem Blue Cross is not participating in the SHOP, but instead is participating in an alternative private, purchasing pool, founded by agents and brokers, known as California Choice.


Small Business Tax Credits

The ACA created small business tax credits to help small, low wage employers purchase coverage for their employees. These credits reimburse up to 50% of what the business contributes towards health plan premiums. The credits are at their maximum for employers of 10 employees or less and average earnings of $25,000 or less then phase down and out as the employer size reaches 25 and the average wages reach $50,000. The credits have been in existence since the ACA was passed in 2010, but at lower levels.


The Mandates

There are two mandates in the ACA: an individual mandate and a large employer mandate; there is no small employer mandate. The individual mandate, which takes effect in 2014, requires all citizens and legal permanent residents to enroll in coverage with exceptions for financial hardship and religious beliefs and those exempt from filing federal taxes. The individual mandate requires coverage for at least the lowest cost bronze plan (pays 60% of expected medical costs). Or an individual can have grandfathered coverage that could cover even less.

The large employer mandate takes effect in 2015. It requires employers of 50 or more full time equivalent employees to “pay” or “play”. Play means offering to pay at least 60% of the cost of the lowest cost bronze plan (covers 60% of expected medical costs). Pay means paying $2000 per full time employee (minus the first 30 employees) if one employee uses premium assistance in Covered California. Full time employee means 30 hours a week or more and 90 days on the job. For most large employers there is little change as 94% offer coverage and 98% of eligible employees are covered.


Ten Essential Health Benefits

The ACA requires individuals to have coverage for ten essential health benefits. These include familiar services such as doctors, hospitals, prescription drugs, lab, prevention, maternity, well child and behavioral health. Most and more are already included in standard employer plan.

California’s minimum requirements for health plans already require most of these services. Maternity benefits for example were required under California law for employer plans, but not until relatively recently for individual insurance coverage. Some services on the list may be unfamiliar, such as “Habilitative and Rehabilitative” services. This includes wheelchairs for persons injured in a terrible accident or with birth trauma and rehab services needed to regain functioning after a stroke. Prescription drugs were not a required benefit under California law; however virtually all employer plans cover them and they are required under the ACA.

States were given 10 choices as to how to define their minimum essential benefits. California chose the most popular small business plan, the Kaiser Small Group 30 plan.

A typical employer plan has an actuarial value of 80%; this means it will pay about 80% of a group’s expected medical costs; Medicare has a similar value. The ACA requires an individual to maintain coverage of at least the lowest priced bronze plan, i.e. a plan that will cover 60% of their expected medical costs.

Young adults under the age of 30 can meet the individual mandate with catastrophic coverage (about 50% of expected medical costs). Individuals with financial hardship (the premiums of the lowest cost bronze plan exceeds 8% of the household income) can also purchase catastrophic coverage. Catastrophic coverage is only available in the plans offered by Covered California.


Coverage for Spouses and Children of Small Business Employees

For those small businesses who offer employee only coverage, the ACA offers coverage for their uninsured spouses and children. Uninsured spouses are eligible for premium assistance through Covered California if the family income is between 138% and 400% of FPL. Children are eligible for Medi-Cal up to 250% of FPL and for Covered California above that. Family members with household income over 400% can purchase coverage through Covered California, but without premium assistance. The ACA’s offer of adult children up to age 26 continues to apply.


Underwriting Rules

These rules apply to all plans sold to small employers. There are some modest improvements for California small businesses as compared to existing California law.

The rules are quite similar for individuals. There are very large improvements for individuals, including California’s self-employed, as compared to existing California law.

 Guaranteed Issue: The ACA requires all health plans selling coverage in the small employer market to sell to all comers; in other words plans must sell your business coverage regardless of the health status of your employees. California has required a similar policy for small employer plans since 1992.

Guaranteed Renewal: The ACA requires all health plans selling coverage in the small employer market to renew coverage to all participants, regardless of their health status or claims experience. California has required a similar policy for small employer plans since 1992.

Pre-Existing Condition Exclusions: The ACA requires all health plans selling coverage in the small employer market to eliminate their pre-existing condition exclusions for all participants. Since 1992 California has restricted small employer plans to a one time only, six-month exclusion if a new employee had not maintained continuity of coverage.

Rating based on health status or claims experience: The ACA requires all health plans selling coverage in the small employer market to eliminate their rating based on an employee’s health status or claims experience. In 1992, California restricted health status or claims rating to +/- 10% for small employer plans.

Age rating: The ACA permits age rating within a 3/1 rate band (i.e. premiums for a 64 year old can be three times as much as a 21 year old). Premiums increase with age on an employee’s birth date. In the 1992 reforms, California permitted age rating; premiums increase at 5 and 10 year intervals, depending on an employee’s age – e.g. 20, 30, 40, 50, 55, 60 and 65.

Geographic rating: The ACA permits states to decide the number of geographic regions, subject to federal approval; California chose 19 regions, and the federal government approved this configuration. In the 1992 reforms, California permitted geographic rating with plans using only 9 regions.

Family size: The ACA permits increases in premiums based on the number of members of the employee’s family. In the 1992 reforms, California permitted family size rating based on 4 family variations – e.g. single, couple, with one child and with children.

Gender rating: The ACA bars rating based on an employee’s gender. California adopted the same policy in 1992.


A Note of Caution About Dropping Employment Based Coverage

Some employees may wish to use Covered California for their own coverage or their children’s coverage because they cannot afford their premium contributions for their employment-sponsored coverage. This is only rarely a good idea as they would be ineligible for premium assistance in Covered California unless their share of “employee only” coverage exceeds 9.5% of their household’s income. As a general rule, employees should stick with their employer’s coverage and have a very clear understanding of the consequences of dropping coverage for themselves or their children in order to enroll in Covered California.


The Self-Employed 

Self-employed individuals are often covered through a spouse or parent, through private individual insurance or are uninsured. The uninsured have new options under the ACA and should look at their coverage options in the individual market inside and outside Covered California. The ACA’s underwriting reforms will give them the same protections inside and outside Covered California; however premium assistance is only available inside Covered California.

Based on survey data, nearly 45% of those with private individual coverage might be eligible for some premium assistance under the ACA. Self employed private individually insured individuals with incomes up to 400% should review their existing coverage and their Covered California offerings with their brokers to determine which best meets their financial and medical needs.

A self-employed spouse or adult child may in some circumstance have a choice between employment-based coverage through their spouse or parent and the new ACA coverage options. This will require a careful analysis and cautious review of the plans, provider networks and financial assistance available in each option.


Start-Up Small Businesses

Start-up businesses often begin with low pay, few employees and no benefits. The ACA offers two important new choices. The individuals can apply for Covered California and receive the premium assistance for which they qualify. The small employer can apply to and use the Covered California SHOP and receive premium assistance for the employer share of the premium for up to two years. The added advantage of purchasing as a business is that the employer share of premium is a pre-tax benefit. The choice is clearly a business decision based on the company’s cash flow and financial stability, the start-up’s assessment of its expected growth in revenues, salaries and the need to retain valued employees.


Job Lock

Employees stay on jobs because they or their family members cannot get health benefits due to pre-existing conditions. The ACA’s underwriting reforms for the small employers and individual markets and the premium assistance available through Covered California remove this job lock barrier to employee mobility and improved economic performance.


New Hires, Terminations, and Layoffs

Provisional and temporary employees may not qualify for health benefits until the end of a 90 day probationary period. Terminated employees have access to COBRA, but frequently lack the means to pay the premiums (the employer’s average premium plus three percent). The ACA’s underwriting reforms and the premium assistance through Covered California provide a new option of affordable and accessible coverage during probationary periods and job transitions.

The Costs and Revenues of the Affordable Care Act and their Impacts on the Federal Budget Deficit

The American health system is twice as expensive as the average for all the other industrialized countries and yet leaves many of its citizens uninsured (nearly 20% of Californians over the course of the year) with middling health outcomes.[1] Its high cost is due to high prices, not to high use of services.[2] About half the cost is in the private sector (employers and individuals), which is reinforced by the tax breaks and tax advantages for employment based coverage,[3] and the other half is in the public sector, primarily for the costs of seniors and the disabled.[4]

Unlike past public program expansions such as the addition of prescription drug coverage for seniors and the disabled, the Affordable Care Act was fully paid for. In fact when it was enacted, it was projected by the Congressional Budget Office to extend the financial solvency of the Medicare program by over 12 years and reduce the federal budget deficit modestly in the first decade and very substantially over the following decade.[5]

The ACA reduces health spending by $483 billion over the period 2010-2019 and raises revenues by $413 billion.[6] The costs of the ACA would be $763 billion, leaving a net budget reduction of $132 billion for that 2010-2019 time frame.[7] The new revenues include higher taxes on high-income individuals, health plans, medical devices, tanning salons, drug manufacturers and fees from uninsured individuals and large employers who offer no coverage for their employees.[8] The spending reductions include reductions in the rate of increased payments for hospitals, nursing homes, home health care, Medicare Advantage and cuts in hospitals’ DSH payments.[9] Many prospective enrollees will pay for a share of their medical costs, albeit with their premium and out of pocket cost contributions subsidized on a sliding fee basis based on their incomes.[10]

The initial projections of the ACA’s costs have recently gotten even lower as the rate of growth in the nation’s health spending has slowed appreciably. CBO’s estimates on the rate of growth in Medicare and Medicaid program spending have recently been revised downward, based on the sustained, slower growth in health spending – Medicaid by 5.2% and Medicare by 2.2% — the slower growth apparently is due in large measure to the ACA’s reforms in health plan and provider payments and comparable private sector efforts.[11] Federal Medicaid spending will temporarily spike in 2014 to pay for the Medicaid expansion.[12] CBO now projects that federal spending for Medicare and Medicaid will be $200 billion lower during the 2010-2020 time frame than its earlier estimates.[13] In addition, the federal and state Exchanges are thus far negotiating in competitive markets for health premiums lower than earlier projected.[14] Some states with large potential Medicaid enrollment have unfortunately yet to decide whether to accept the generous federal matching rates for Medicaid expansion.[15]

However while the recent and dramatic improvements in federal revenues and sequestrated reductions in spending are sharply narrowing the budget deficit, the longer term still requires continued efforts to better balance revenues and spending as baby boomers move from the workplace onto Social Security and Medicare as they retire.[16]  The ACA helps to address the long-term budget deficit through caps on the growth of Medicare spending and Cadillac benefits.[17] Repealing it would significantly increase, rather than decrease the nation’s deficits.[18] The ongoing challenge the public and private sectors face in common is the adoption of payment reforms, such as pay for performance, reference pricing based on value, bundled payments and global budgets, not the quixotic efforts to repeal the ACA.[19]

[1] See Schlaboski, Health Care Systems Around the World (ITUP, 2008 at and Wulsin, International Health Effectiveness Comparions: How does the US Stack Up (ITUP, April 29, 2008) at

[2] See ITUP, Reforming California’s Delivery System (January 24, 2011) at

[3] State and federal tax policies subsidize about 1/3rd of the cost of private insurance. See Sheils and Haught, The Cost of Tax Exempt Health Benefits in 2004, Health Affairs, (February 2004) at

[4] See Wilson, Health Care Costs 101: Slow Growth, a New Trend? (CHCF, September 2013) at  Yoo, 2012 Health Care Financing Report (ITUP, October 25, 2012) at

[5] See Congressional Budget office, Analysis of HR 3590, Letter to Senator Harry Reid (March 11, 2010) at and CBO, Letter to Honorable John Boehner, Providing an Estimate for HR 6079, the Repeal of Obama Care Act (2011) at

[6] Ibid.

[7] Ibid.

[8] Ibid. See Connolly, the Affordable Care Act, How is it Financed (September 26, 2012) at

[9] Ibid.

[10] See ITUP, ObamaCare 101, Presentation Slides (August 2013) at

[11] See Elmendorf, How have CBO’s Projections if Spending for Medicare and Medicaid Changed Since the August 2012 Baseline (CBO, February 21, 2013) at www.cbo.gove/publication/43947

[12] Wilson, Health Care Costs 101: Slow Growth, a New Trend?

[13] Ibid.

[14] Varney, California Insurance Exchange Rates: Not too High, Not too Low (Kaiser Health news, may 24, 2103)

[15] Tavernise, Millions of Poor are Left Uncovered by New Health Care Law, New York Times, October 2, 2013) at Other states are doing their best to sabotage the federally administered Exchanges. See Reston, Obamacare Meets Extra Resistance in Oklahoma (Los Angeles Times, October 4, 2013) at,0,1239453.story

[16] See CBO, The 2013 Long Term Budget Outlook (CBO, Septemebr 17, 2013) at

[17] See n. 5 and 8.

[18] See n. 5.

[19] See for example, Stabile, et al. Heath Care Cost Containment Strategies Used in Four Other High-Income Countries Hold Lessons for the United States and MacDonnell and Darzi, A Key to Slower health Spending Growth Worldwide Will be Unlocking Innovation to Reduce the Labor Intensity of Care, Health Affairs (April 2013) at

Understanding the ACA: an Employee’s Perspective

I’m employed and insured through my employer. The only significant changes are: no cost coverage of your preventive services and elimination of the annual and lifetime caps on your covered benefits.

I’m employed and uninsured. You can now apply for Covered California and Medi-Cal. You have a choice of plans, what amount of coverage you want and which providers you prefer. You can qualify for help paying your premiums and your copays and deductibles based on your income.

I’m employed and insured with my own private individual insurance. You can keep your private individual insurance or you can now apply for Covered California and Medi-Cal. You have a choice of plans, what amount of coverage you want and which providers you prefer. You can qualify for help paying your premiums and your copays and deductibles based on your income.

I’m employed and uninsured and don’t want coverage. You will need to pay a penalty of $95 or 1% of income whichever is higher, unless you are exempt due to financial hardship, religious objections or other specific exemptions. The penalties increase in future years.

I’m employed and uninsured and want the minimum coverage necessary to avoid a penalty. You might want to purchase the lowest cost bronze plan that will pay 60% of your expected medical costs or if you are under age 30, the catastrophic plan that covers about 50% of your expected medical costs. If you purchase the bronze plan you can qualify for help paying your premiums. If you purchase the silver plan you can qualify for help paying your premiums and your copays and deductibles based on your income.

I was working and insured, but just got laid off. You can now apply for Covered California and Medi-Cal. You have a choice of plans, what amount of coverage you want and which providers you prefer. You can qualify for help paying your premiums and your copays and deductibles based on your income. Or you can apply for COBRA coverage, which if you are older and do not qualify for premium assistance through Covered California might be better for you. Make sure you check out the comparative costs and coverage first.

I just got a new job and am uninsured and my coverage does not begin for 90 days. You can now apply for Covered California and Medi-Cal. You have a choice of plans, what amount of coverage you want and which providers you prefer. You can qualify for help paying your premiums and your copays and deductibles based on your income.

I work for a small employer who covers me, but not my spouse or kids. Your spouse and children can now apply for Covered California and Medi-Cal. You will have a choice of plans, what amount of coverage you want and which providers you prefer. You can qualify for help paying your premiums and your copays and deductibles based on your income.

I work for a large employer who covers me, my spouse and kids, but I can’t afford the premiums. You can apply for Medi-Cal and Covered California however you cannot get help paying your premiums, copays and deductibles through Covered California for yourself or your children unless you meet a very high bar of unaffordability – your employee only share of premiums would have to exceed 9.5% of family income. Depending on your family income, your children might be Medi-Cal eligible.

It is April 1, 2014, I am uninsured and forgot to do anything about this; I’m really sick and now need medical coverage.  The next open enrollment for Covered California is October 15, 2014 through December 7, 2014; you must wait ‘til then unless you fall into one of the exceptions. There will be no pre-existing condition exclusion when you are next eligible to apply for Covered California. You can apply for Medi-Cal at any time if your income is low enough.

Understanding the Government Shutdown

The stated purpose of the House Republicans was to defund, delay, eviscerate, or render inoperable the Affordable Care Act. It was a long shot given that President Obama was overwhelmingly re-elected; the Democrats won the Senate, and the popular vote for the House, although a minority of House seats due to the effective gerrymandering of the House after the 2010 elections. It was a long shot effort that has propelled Senator Ted Cruz to national prominence and leadership of a hearty and enthusiastic band of Tea Party adherents, but there is as yet no readily apparent exit strategy for House Republicans, short of a humiliating defeat.  Sometimes, it is necessary to take defeats to make an important point, but the functioning and continued growth of the nation’s economy can and will be imperiled by a prolonged shut down. Many of the American people made a counterpoint yesterday when by the millions and millions they took to their computers to check out and try to sign up for the coverage expansions under the Affordable Care Act – over 500,000 in California alone. Lurking in the background is the prospect of an even more consequential confrontation over raising the debt limit, which has the potential to further roil the economy and again endanger the nation’s and the world’s financial institutions. The Tea Party is playing with fire at a time when their popularity has been steadily shrinking and their aspirations are growing disproportionate to their real power for governing. They have shown a remarkable ability to knock off party regulars in contested primaries and yet to cost their party seats in contested general elections. They are a growing part of a shrinking party that knows it needs to re-introduce itself to the nation’s Latinos, yet trips over its own right foot when presented an opportunity to reform a badly broken immigration system. Many Republican Governors in the West and Midwest are doing a fine job of implementing the Affordable Care Act in their states, although it is still highly controversial among the party’s Deep South base.  One can hope that Speaker John Boehner will be able to rally his troops to make some sensible compromises to move the nation forward after the necessary chest thumping has subsided on all sides and wise policy makers are ready to agree on important budget and policy reforms that are urgently needed to accelerate the nation’s economic recovery.

Forty Years!

After graduating law school, I went to work for Boston Legal Services, where as a young lawyer I tried cases on behalf of individual clients with few resources and no political power, in Roxbury, Dorchester, the South End and East Boston.

One of my clients who had been laid off came to see me and explained that he’d just gotten a job and then a notice cutting off his family’s Medicaid coverage. He said “Don’t worry about me I can get my care through the Veterans Administration because I’m a disabled Vietnam veteran, but can you do something for my wife and kids?” I said “Sure, this must be a mistake, no sane society would cut off your family’s health coverage just when you get a job; I’ll get it taken care of”. After a lot of legal research, I had to come back to him and report to him, “This is crazy, but that’s what our laws are, and I’ll try to get it changed”. I thought it would take at most a year to get this changed; it’s taken 40 years of my work life. This fundamental flaw in the American health care system changes as of today. It’s taken over 100 years of our country’s history since President Teddy Roosevelt’s first proposals as a candidate in 1912 were developed, but on January 1, 2014, this is about to change and affordable coverage will be offered to every American. This is the most important change in health policy in this country since the passage of Medicare and Medicaid in 1965. It will allow the United States to join every other Western industrialized country in offering health coverage for all its citizens.

Let me just tell you a couple more stories both on why I got hooked and stayed with it, what the Affordable Care Act does. After a couple of years of really hard legal work, I got quite sick with a then little known disease that the doctors had a really difficult time diagnosing; they were afraid it was leukemia. They finally diagnosed, and it wasn’t, but it took three months of recovery to fully get back to work. My employer kept me on salary and paid for my health insurance the whole time. Several years after, a new client came in. She was a college grad working as a secretary who developed a serious but treatable condition that left her temporarily unable to work just as I had been. Her employer had laid her off, so she lost her health coverage. While she had unemployment insurance to help pay her rent and food bills, she had no money left over to pay for her medications and doctor visits, let alone the cost of insurance, for which she would have been ineligible anyhow due to her pre-existing condition. At just the same time, the newly elected Governor of Massachusetts and the state legislature terminated medical coverage to a large group of low-income individuals of which she was one.  In California we call this group, the MIAs. I sued the Commonwealth of Massachusetts on her behalf and lost that case. Later when I moved to California, the state’s Governor and legislature did the exact same thing in 1982.

It was about that time, I concluded that “If you can’t beat ‘em, join them” and went to work for the California legislature to work with a dynamic young legislator who was trying to change these laws. Working with both Democratic and Republican lawmakers, California actually got quite a lot done to cover pregnant women, to stop hospitals and doctors from denying emergency care to people with no health insurance, and to stop health insurance plans from denying, terminating or jacking up the cost of health insurance to small employers with an employee who comes down with an expensive condition like a heart attack, cancer, AIDs, a disabled child or even pregnancy.

Over the last thirty years, California policy makers have tried many approaches with many different legislative authors to cover the uninsured. Some were known as single payor (Canadian style coverage); some were employer mandates (employers must offer coverage); some combined employer, individual and government contributions, known as “shared responsibility”; some were for catastrophic coverage. These efforts most recently culminated in the bi-partisan Schwarzenegger-Nunez proposed legislation of 2007-08, California’s version of the Massachusetts reforms, know as Romney Care. California was never able to muster the financial resources and political will to cover the uninsured in large measure because of California’s 2/3rds vote requirements for new revenues and spending.

California now has over 7 million residents who are uninsured at some point during the year, that’s nearly one out of every five children and adults under age 65 (20%), and the numbers and percentages get higher and higher nearly every year since the mid 70’s. Our nation has almost 50 million uninsured, that’s over one in seven of our nation’s citizens under 65. Over 80% of the uninsured are in working families, and they don’t get private coverage at work, and they don’t qualify for public coverage (Medicaid) in their states.

About seven years ago, Governor Mitt Romney signed into law “RomneyCare”. Since its implementation, Massachusetts now has 98% insured, a 2% uninsured rate. About three years ago, President Obama signed into law the Affordable Care Act (ObamaCare), which is pretty much a carbon copy of RomneyCare, maybe a little better around some of the edges.  It fills the gap for individuals not covered through their work and not eligible for either Medicaid or Medicare.

What are the problems Congress was trying to solve? It’s both affordability and coverage. Private health insurance for the average American family costs as much as our nation’s minimum-wage salaries. In other words, a minimum wage worker would spend his or her entire salary buying private health coverage for the family.

What’s in the Affordable Care Act? First, expanded public insurance (known as Medicaid) for the lowest income working poor, (that’s the MIAs, the low wage workers, the working parents and their families I referred to earlier),[1] and private individual insurance made more affordable through tax credits for the non-poor, that is for individuals with moderate and middle incomes not covered at their place of work.[2] Second, protections for individuals and small employers so they cannot be denied coverage due to a pre-existing condition like cancer or pregnancy and a large purchasing pool, known as the Exchange or Marketplace, which negotiates premiums on their behalf. And third, a responsibility that every American enroll in either public or private coverage[3] so when you get very sick, you will get care in a hospital or at a doctor’s office.  The hospital and the doctor will get paid for your care, and you and your family won’t end up in a medical bankruptcy losing the funds you have been putting away for retirement, a home down payment, your child’s college education or a new car.

Why should we care about the uninsured? Without health coverage, access to doctors, specialists and prescription drugs is very difficult and inordinately expensive for the uninsured; it causes costly and avoidable hospitalizations as individuals delay care until there really is no other option than the local emergency room.

The ACA has some flaws that will need fixing and adjusting, but it’s a good solid building block for our nation’s futures. Each state will make its own decisions as to how the Affordable Care Act is implemented for their citizens so there will be wide variations from state to state.

Why should you care? First, not all of you are working on Wall Street, not all of you are earning six figure salaries right out of college or grad school. In fact, most of you don’t and won’t — at least not right away. Some of you will be artists; some will start up small businesses and become entrepreneurs; some will wait tables and some do construction; some will work in child-care; some will become farmers, and others may start with part time and seasonal jobs. These are all occupations and types of businesses with high rates of uninsurance. All of you will get sick; all of you will have accidents, and most of you will have or adopt and raise children, and they’ll need medical care too.


Lucien Wulsin Jr., ITUP Executive Director

Dated: October 1, 2013 – the Launch of Covered California


[1] Every state sets it own criteria for Medicaid, ranging from 25% of the federal poverty level (that’s less than $3,000 a year for an individual) in a state like Texas to 300% of the poverty level (over $33,000 a year for individual) in states like Vermont and Massachusetts. The Affordable Care Act pays for the upgraded Medicaid coverage in each state up to just a bit less than $16,000 a year for an individual. After the US Supreme Court decided that the Medicaid expansion was optional with the states, many states with Republican Governors are implementing the Medicaid expansion. Some states with policy makers engaged in massive resistance to the implementation of ObamaCare are not taking the offer of 100% federal match to expand their Medicaid programs. This resistance was the same resistance when Medicaid was first established; it erodes over time as the benefits of reforms become obvious. One state, Arizona, took almost 20 years to implement its Medicaid program.

[2] The tax credits under the Affordable Care Act pay for the difference between an individual’s contributions and the actual cost of coverage.  At the lowest end (e.g. $16,000 a year) an individual may pay 2% of income for coverage, and the tax credit makes up the difference. At the higher end, a family of four earning $95,000 a year would contribute up to 9.5% of their income for coverage, and the tax credit pays the rest.

[3] Each individual picks their level of preferred coverage (this can vary between 60 and 90% of expected medical expenses), their own health plan and their doctors. Young persons and those with financial hardships may prefer the option of catastrophic coverage, which is also offered to them.