The Affordable Care Act (Obamacare) is one of the hottest topics inside the Beltway. Nearly everyone has an opinion on the matter, but relatively few have an informed opinion.
Since the first of the year, I have been researching health care. In the coming weeks I expect to explore the topic from an accountant’s perspective, examining the issues we face in implementing a system that is fair to all stakeholders.
My first topic is how patients can get caught with no insurance because of the administrative nightmares of dealing with multiple systems.
Poor people, defined as those who make no more than 138 percent of the federal poverty level, automatically qualify for Medicaid. In California the Medicaid program is called Medi-Cal. Medicaid programs (including (Medi-Cal) are 100 percent taxpayer funded.
If you make more than 138 percent of the federal poverty level, you no longer qualify for Medi-Cal; you have to purchase insurance through an insurance exchange. In California, that exchange is called Covered California.
Covered California is not an insurance company, but rather a state-run exchange through which you can purchase health insurance coverage from a participating insurance carrier. People who earn between 138 percent and 400 percent of the federal poverty level qualify for subsidized health insurance from Covered California.
According to the Center for Health Reporting, about 12 million California residents have Medi-Cal coverage, while 1.4 million have Covered California plans. Covered California is a large organization with more than 1,200 employees.
The problem that exists is many poor people, including chronically ill people who cannot work full time, earn incomes that hover around the 138 percent poverty level.
Sometimes they earn more than that amount; sometimes they earn less. When their income crosses over the limit, they have to shift between Medi-Cal and Covered California.
The transition between the two is supposed to be seamless, but in reality it is a nightmare for many.
The problem is that both Medi-Cal and Covered California maintain patient records on enormous computer databases. The two databases are supposed to be synchronized, but computer problems frequently result in unsynchronized data.
My daughter, who has cystic fibrosis, got caught up in this mess. She purchased and paid for a plan using the Covered California program. Shortly before the end of the year, someone evidently made an erroneous entry in the Medi-Cal database showing that she is eligible for Medi-Cal coverage.
The day after the Medi-Cal database was synchronized with the Covered California database, her insurance coverage was terminated. A few days later my daughter sought medical service from her usual provider; she was not covered because that provider was not located in L.A. County and Medi-Cal only covers providers in the county of the patient’s residence.
That was how she learned she had been dropped from her Covered California insurance.
My daughter and Cystic Fibrosis Foundation counselors and attorneys spent numerous hours on the phone with various people at Covered California and Medi-Cal who were less than helpful in resolving the problem.
The folks on the other end of the line were not empowered to resolve the matter and had to rely on erroneous computer data. It was extremely difficult to escalate the matter to a person with the requisite authority to solve the problem.
Finally, after four days of phone calls, my daughter was told that the computer error was corrected and her insurance will be reinstated. However, it takes several additional days for the insurance carrier to be notified. The result is that my daughter is uninsured for a two-week period.
From what I read online, my daughter’s problem is not an isolated case. The UC Berkeley Center for Labor Research and Education estimates that one in six people with Medi-Cal coverage are required to change to Covered California plans annually.
Conversely, one in five people under Covered California drop into Medi-Cal.
The organization Neighborhood for Legal Services of Los Angeles County notes: “Covered California and Medi-Cal computer systems aren’t talking to each other very well. The county will say one thing and Covered California will say another thing. It’s the consumer who falls between the cracks.”
The Center for Health Reporting discusses these shortcomings at length on its website here.
While it is frustrating to go into the details of this one aspect of health care, this experience begs some more fundamental questions about our health-care system.
Why do we have multiple health-care systems covering different segments of society? These systems are extensively duplicative from an administrative standpoint.
In about four years, the California insurance exchange has grown to an organization employing a bureaucracy of more than 1,200 people. Is this a harbinger of inefficiencies that would result from the implementation of a single-payer system?
Jim de Bree is a retired CPA who resides in Valencia.