With the deadline to sign up for health insurance under the national Affordable Care Act (ACA) looming, it isn’t just Malibu’s uninsured, low-income residents who need to hustle. Many of the city’s estimated 1,320 self-employed residents are also scrambling after receiving notices that their individual policies will be cancelled on January 1 for not meeting “Obamacare” requirements. Even many residents who still have insurance are checking other options for coverage after finding out their rates are going up.
“In the last two and a half months, we’ve been getting a ton of calls,” said Mark Ball of the local Farmers Insurance branch in a phone interview. “Close to 100 customers have gotten their cancellation notices.”
The ranks of the self-employed in Malibu include physicians, attorneys, small business owners, artists, photographers, Realtors, writers, designers, consultants, contractors and other professionals. Because their medical insurance isn’t covered by an employer’s group plan, they buy individual health insurance policies.
Under the new Obamacare law, anyone not receiving Medicaid or other government health care must have health insurance by March 31, 2014, to avoid paying an income tax penalty the following year. California residents can sign up for a new health plan by going to the “Covered California” website (which does not mention “Obamacare” or “Affordable Care Act”).
The deadline to sign up for a government-subsidized health plan with coverage going into effect on January 1 has already passed. Those not qualifying for government assistance that need insurance by January 1 have until December 23 to sign up through Covered California, but also have the option of going to any other insurance provider.
The ACA provides subsidies for the cost of health insurance to individuals or families with household incomes below certain levels. For example, a household of one is eligible for a subsidy when income is less than $45,960 a year. (Income less than $15,000 a year would get Medi-Cal instead.) Anyone qualifying for the subsidy has to buy insurance through Covered California in order to get the discount.
“If you’re not eligible for a government subsidy, it doesn’t matter if you buy insurance with Covered California or not,” said Vanessa Walder in the Life & Health Department of B.W. Baker Insurance Services on Point Dume.
Seeing higher rates
Many of those not qualifying for a subsidy can expect to pay higher rates than before.
“I like the plans, but especially in Malibu, a lot of people won’t qualify for subsidized premiums and will pay 30 to 40 percent more for insurance, generally speaking,” Ball said. On the positive side, he notes that “there are no pre-existing conditions issues, so a lot of people can apply now.”
Robert Baldwin, a small business owner in Malibu with a spouse and three children, said in a phone interview that he does not qualify for a government subsidy, and buying insurance from Covered California will mean a higher deductible and paying $450 per month more for coverage.
“In the early ’90s, I once had to defer a mortgage payment in order to pay for health insurance, so I know what it’s like to struggle,” Baldwin said. “[But] this has very little to do with healthcare and a lot to do about the government meddling in affairs that most of us have taken care of ourselves in the past.”
Navigating system a challenge
Susan Peters, who handles insurance for local Dr. Jeff Harris, said, “People whose individual policies are going up are looking into Covered California as an option… but the only non-HMO insurance companies on the exchange are Anthem, Health Net and Blue Shield.”
Navigating the Covered California website can be easier said than done.
“It’s all in a state of confusion.” Ball said. “Their system is iffy, and if you call with a question, it’s up to a two-hour phone wait. If you need to call, call right at 8:00 a.m. when they open – after that, forget it…I tried live chat and there were 60 agents ahead of me. It’s challenging.”
Although Covered California allows applicants to print off a mail-in application as an option, Ball says don’t go that route.
“The biggest issue right now is trying to get paper applications processed by the deadlines,” he said. “Covered California doesn’t hire enough people to do the inputting and the whole system was not well thought out.” He advises signing up online.
A common word of advice when changing insurance is to “check with your doctors and see which insurance carriers they’re accepting,” according to Walder.
Provider networks for all insurers are currently in a state of flux. “The provider networks can be different than they were before, even with the same insurance company,” cautioned Ball. “For example, Cedars- Sinai [Hospital] is only on Health Net now. The provider networks are changing significantly. There’s a lot of upheaval in the market.”
Peters expressed frustration.
“Covered California came up with this mysterious selection process for healthcare providers and we haven’t been included in any of their networks yet,” she said. “It’s based on demographics and how many doctors are in a certain specialty in each area. The information changes daily.”
In contrast, Vanessa Ferguson with UCLA Health System- Malibu, was not aware of any problems with their networks or patients.
“The majority of our patients have Anthem, and they’re just keeping the insurance they have,” she said.
Reflecting the uncertainty of healthcare providers about the new networks, Cedars-Sinai recently sent postcards to Malibu residents with individual health insurance policies, urging them to “make sure your new insurance plan allows you to receive full coverage for [Cedars-Sinai].”