A new state-run health-insurance marketplace, called Covered California, was trumpeted in Long Beach last week as a plan to provide uninsured citizens with healthcare coverage that officials say will be more affordable than the current system.
The health-insurance exchange is the State’s attempt to carry out mandates of the Affordable Care Act, also known as Obamacare. Congress passed the federal healthcare-reform legislation in 2010, requiring that all United States citizens over the age of 18 be covered by the end of next year or face penalties.
In the run-up to a statewide advertising and marketing campaign in coming months that aims to insure millions of people, Covered California Executive Director Peter Lee spoke to a diverse crowd of attendees, including local city councilmembers, college students and senior citizens, during a townhall meeting on Friday, Sept. 6 at The Pointe in the Walter Pyramid of California Station University, Long Beach (CSULB).
Lee said uninsured individuals only have a six-month window– from Oct. 1 to March 31– to enroll in the State’s exchange for coverage that starts Jan. 1, 2014, adding that a community-outreach campaign will be in full swing through November and December.
“We recognize this is new,” he said. “This is the starting line of a historic change– the biggest change in health care in America since Medicare was launched 50 years ago. This is not going to be easy or simple.”
Covered California estimates that more than 5 million Californians could benefit from health plans offered through the exchange, with 2.6 million of those individuals, who don’t receive insurance assistance through their employer or the government, eligible for federal subsidies. Lee said 1.4 million people in the state are eligible for benefits through expanded Medi-Cal– the state’s Medicaid program– for citizens over 65 years old.
Congressmember Alan Lowenthal, who co-hosted the event, said there are likely to be some hurdles in getting all uninsured people enrolled by the deadline, but he said the law’s goal of making health care affordable would only work if all citizens are covered, adding that community outreach will be key to the law’s success.
“We’re trying to get everybody in society in an insurance policy and covered– that’s a huge step,” Lowenthal said. “So there will be bumps along the way, and we’re going to try to answer every question along the way.”
The main incentives for people to become insured through the new law are not only the penalties that may follow for not doing so but the federal subsidies provided to small businesses and low-income individuals and families as well.
For individuals and families, financial assistance is offered on a “sliding scale” based on income, age, residency and household size. Premium assistance will be offered to uninsured individuals with annual incomes of up to $45,000 a year and families with household incomes of up to $95,000, Lee said.
For businesses, large employers will be required to offer all full-time employees coverage assistance starting in 2015 or face penalties. However, small businesses with less than 50 employees won’t be required to offer assistance and instead will be given federal subsidies that would help them provide coverage through the exchange.
The theory is that getting all citizens covered will ultimately make health care more accessible and affordable for all, Lee said.
“Health care should be a right, not a privilege,” he said. “We are all paying the costs of people who don’t have health insurance when they go to the emergency room. We’re paying because it’s the most expensive way to get care, the worst way to get care.”
Still, Lee pointed out that, even though illegal immigrants won’t be eligible for benefits, there still needs to be a system in place to maintain care for the 1 million to 2 million undocumented people in California as well.
“This means we need to have a robust safety net of providers like community clinics and public hospitals,” he said.
Individuals and families not offered federal assistance because their incomes exceed the threshold or because they are already covered through their employers or the government won’t need to take any action unless their health-coverage status changes. Still, Lee said these individuals would be offered new healthcare plans “anytime they may need it.”
Under Covered California, individuals will be able to purchase a specific health plan from multiple private insurers to fit their specific needs. Health plans range in cost, with factors including the out-of-pocket expenses a person pays for visiting a doctor, the cost of monthly premiums and deductibles. The exchange offers four levels of health plans, categorized from cheapest to most expensive: bronze, silver, gold and platinum.
Lee gave an example that, under the least expensive tier, a single Long Beach resident who makes $22,000 a year would receive a $92 subsidy from the federal government for a $176 monthly premium. Under the same level, a family of four and a household income of $65,000 would receive a $380 subsidy out of a nearly $600 monthly premium.
“We have not made healthcare free,” Lee said. “We have not made healthcare costs in America cheap. What we’ve done is given tools to give a financial leg up to make healthcare affordable.”
All plans purchased through the exchange are required to cover “essential health benefits,” which include doctor visits, hospitalization, emergency care, maternity care, pediatrics, prescriptions drugs, medical tests, mental health care and others. Plans must also provide preventive-care services, such as mammograms and colonoscopies, for free.
Another major change is that healthcare-insurance rates will no longer be based on a person’s health history, referred to as preexisting conditions. The move is expected to encourage more people to seek care since their past won’t be a factor in the cost, he said.
“Why do people not have health insurance?” Lee asked. “With the current health insurance you can be turned away if you sneezed in the past. You can be turned way if you have cancer. You can be turned away if you have diabetes. So millions of Americans aren’t insured with a preexisting condition.”
Those who oppose Obamacare, however, claim that the new mandated system will actually make healthcare insurance more costly for young people, since they will be paying higher fees that will go to pay for the cost of elderly people who often need more expensive care and treatments.
During the forum, a majority of the audience members indicated they are already covered, but some questioned how the cost of the federal subsidies would impact taxpayers and the national debt and whether the country’s healthcare system will be able to handle such a large volume of insured customers all at once.
Though Lee replied to questions and Covered California representatives provided attendees with fact sheets in several different languages, some college students said they still weren’t satisfied with the answers.
“Where are we going to get the money to pay for all the doctors and nurses, because it’s expensive care,” said one CSULB nursing student after the townhall meeting. “Where is the extra money going to come from?”
Daniel Gonzalez, also a nursing major, said he has yet to see how the new law will put more money into preventative care rather than just getting people insured.
“I do think it’s good that we are actually getting coverage because, I mean, it will help people,” he said. “I’m just hoping that it will help people make better choices.”
Lee said college campuses are “ground zero” for making sure the Affordable Care Act works, since thousands of students will be required to enroll after they leave their parents’ coverage. He added that making sure all ethnicities get the care they need is also important, especially in Los Angeles County, where he said there are 780,000 people eligible for federal subsidies.
“If the Affordable Care Act does not work in LA County, it’s not going to work in California, and it’s not going to work in America,” Lee said. “If we aren’t addressing the diversity of California, we will not be successful.”