STUMP » Articles » Obamacare Watch: The Disaster of Covered California » 26 April 2015, 08:06

There’s more to the Obamacare disaster than the pain of all the tax stuff.

The pain of the Obamacare exchanges is not yet over, and I’m not even referring to the Supreme Court case to be decided.

Ignoring the whole federal exchange issue for now, let’s look at the largest state exchange: Covered California.

Sheryl Attkisson did a two-part piece on the problems with Covered California…and not only preceding it going live in 2013. These are ongoing problems.

From the first part:

California’s health insurance exchange, established under the Affordable Care Act, has been held out as a national model for Obamacare. In some ways—not all of them good—it is. Whether it’s falling far short of 2015 enrollment goals or sending out 100,000 inaccurate tax forms, Covered California is struggling with its share of challenges.

Now, several senior-level officials integral to the launch of Covered California—who enthusiastically support the Affordable Care Act—are speaking about what they view as gross incompetence and mismanagement involving some of the $1 billion federal tax dollars poured into the state effort.

…..
But five months on the job converted Hill from avid supporter to disenchanted whistleblower. He says the secretive and dysfunctional culture was more interested in cheerleading than real results. After he persistently raised concerns, Covered California abruptly terminated his contract. He says the experience drove him to raise allegations about waste and cover ups at a Covered California board meeting.

……
Another telling statistic is Covered California’s poor retention rate. Even though people are required by law to have health insurance, only 65 percent of Covered California’s 2014 customers reenrolled in 2015. The rest dropped off.

Covered California would not address our questions about lackluster retention and growth.

Pay attention to that last line. It will come up again.

From the second part:

Aiden Hill’s introduction to the secretive culture at Covered California came in his first days on the job. He had just been hired to head up the agency’s $120 million call center effort when he emailed a superior April 18, 2013, and got a text message in reply:

“Please refrain from writing a lot of draft contract language in government email … And don’t clarify via email … No email.”

Later, concerned about contractor performance, Hill conducted an Internet search for “best practices” information to forward a superior. Afterward he got this text:

“Aiden—Please stop using government email for your searches.”
…..
After that public display, Covered California hired a law firm to conduct an independent investigation into allegations that management “engaged in a cover-up” and “knowingly allowed two contractors to engage in waste, fraud and abuse.”

The firm conducted 45 interviews with 25 witnesses. Last December, Covered California notified Hill that the independent probe concluded “the evidence did not support” any of his claims.

Hill calls the inquiry a sham and says investigators failed to interview key witnesses he suggested. Covered California declined to answer our questions on this topic, or any other.

Again, these relate to the 2013 launch, but there are ongoing problems. Indeed, Covered California is about to run into a brick wall:

After two previous extensions, the open enrollment period for Covered California ends April 30. That deadline just might prove to be the tipping point for the state’s two-year-old health insurance exchange.

That’s because this is the year Covered California is supposed to become completely self-sustaining.

Indeed, there’s no more money coming from Washington after the state exhausts the $1.1 billion it received from the federal government to get the Obamacare exchange up and running. And state law prohibits Sacramento from spending any money to keep the exchange afloat.

That presents an existential crisis for Covered California, which is facing a nearly $80 budget deficit for its 2015-16 fiscal year. Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California Executive Director Peter Lee acknowledged in December that there are questions about the “long-term sustainability of the organization.”

…..
The state auditor’s warning appeared prescient as of Feb. 15, which was supposed to be the close of open enrollment for 2015: Covered California had fallen 300,000 enrollees short of the goal set by Mr. Lee and the agency’s board of directors.

Indeed, Covered California’s enrollment growth for 2015 was a mere 1 percent, according to a study this month by Avalere Health. That was worst than all but two other state exchanges. Meanwhile, California’s Obamacare exchange managed to retain only 65 percent of previous enrollees, the nation’s fourth-lowest re-enrollment rate.

Remember that the exchanges are the only place where people can get subsidies for their premiums.

If you buy a policy off-exchange, you will not get any subsidies whatsoever. As the income limit is at a level such that many people exceed it, that subsidy cliff does kick off quite a few possible customers.

Attkisson’s piece links to a blog called Insure Me Kevin, which evidently was started by a guy who was pro-Obamacare…. initially.

His about me page still says he’s pro-Obamacare:

Affordable Care Act

I support the ACA. It’s not perfect, but it’s a better system than the one we have now that puts profits before people. My Navigator page shows some of the different options for guarantee health insurance through California’s health insurance market place, Covered California. I post blogs on the development of the exchange, health plans offered, and the premium assistance offered.

Looking at most of his recent posts, they seem more to be about informing regular people – like how to update income information on Covered California. It’s good that somebody is doing this.

I decided to check out what he had to say about Covered California’s tax issues.

Most recent post is on how to refile one’s return if you got an erroneous 1095-A:

You do not need to file an amended return based on your corrected Form 1095-A. This is true even if additional taxes would be owed based on the new information. Nonetheless, you may choose to file an amended return. Comparing the forms can help you determine whether you are likely to benefit from filing an amended tax return.

Specifically, you are likely to receive a larger refund or owe a smaller tax payment using the corrected Form 1095-A if the two Forms 1095-A generally show the same information but any one of the five scenarios below is true on the corrected form.

Then he goes on to list the five situations. This is not only for those in California.

By the way, why were the California 1095As screwed up?

Here’s one reason – pediatric dental coverage was omitted:

D’ho, we forgot to add your pediatric dental premiums

This additional tax stress is brought to Californians because Covered California decided to make pediatric dental insurance separate from the health insurance AND someone at Covered California forgot to read the IRS instructions on how to generate the 1095-As. Pediatric dental insurance is an Essential Health Benefit that was mandated to be in all health insurance plans by the ACA starting in 2014.

2014 Covered California excluded children’s dental

For reasons that still remain a mystery to me, Covered California decided pediatric dental could be offered as a stand-alone plan that families could purchase separately from the health insurance. Aside from the confusion this created on the Covered California website, many families never purchased the pediatric dental insurance for their children 18 years old and younger. When the pediatric dental option finally appeared on the Covered California enrollment website in November of 2013, many families did purchase dental insurance. Most off-exchange health plans built the pediatric dental benefits directly into the health plan which Covered California finally did for 2015.

There is a lot more in that post, by the way — and not only about pediatric dental coverage. Kevin isn’t making so much comment on how screwed up things are (like I do) – he’s mainly trying to help people figure out what they need to do.

So if you’re in California, and have to deal with Covered California, Kevin’s blog looks like a great place to go.

Not mine. Sorry, I’m just here to point out how things get screwed up, not how to deal with these things yourself. My condolences if you have to deal with this.