Since its debut last October, Covered California, the state’s online health insurance exchange, has been plagued by software glitches and other problems that have routinely shut the website down, sometimes for days at a time.  As of March 17, Covered California reports one million Californians have enrolled in healthcare plans through the website. Compared to the 6.9 million Californians who were uninsured in 2010 and predictions that 5.6 million Californians will be uninsured in 2015, that number is weak.  

Behind the statistics are the actual experiences of individuals and families who have applied for healthcare insurance through Covered California.  Their stories offer insight into the realities of the application process and also help explain why more Californians are not applying for healthcare coverage. 

Rhonda (not her real name) is a licensed insurance agent living in the San Francisco Bay Area.  In order to assist clients purchase insurance through Covered California, Rhonda was required to complete an 8-hour course offered by one of the insurance agencies authorized by the state to train and certify agents.  Although she passed a course offered by Warner Pacific, Rhonda stated that she left the course “not knowing what to do.”  Rhonda’s personal experience helping clients apply for healthcare through Covered California shines a light on the confusion and inconsistencies of the application process.

ObamaCare provides financial assistance to individuals and households earning between 100% and 400% of the federal poverty level (“FPL”). The premium tax credit reduces the out-of-pocket premium cost for qualified enrollees purchasing healthcare insurance through state exchanges.  The amount of the tax credit is based on the cost of the second-lowest silver metal coverage plan (the “benchmark plan”) for an applicant’s age, family size and geographic area. Eligible individuals and households apply the value of the premium tax credit towards any healthcare plan offered, including the more expensive platinum and gold metal coverage plans, as well as the less expensive bronze metal coverage plans.

Eligibility for the premium tax credit is calculated based on two factors:  the number of dependents a taxpayer deducts on his or her income tax return and the household’s modified adjusted gross annual income. Under ObamaCare, the amount of the premium tax credit must be reduced proportional to any listed dependents that are not “lawfully present.”

Rhonda helped a 35-year old single parent with three listed dependents apply for healthcare through Covered California.  Two of the children live in Mexico and are not U.S. citizens, while the third child lives with the parent and is a citizen.The family’s annual income is $38,000, or 150% FPL for a family of 4.  The FPL percentage is adjusted to 250% for a family of 2when the children living in Mexicoare removed from the equation.

In addition to expanding Medi-Cal coverage for individuals earning up to 138% FPL, California also increased the Medi-Cal eligibility threshold for dependents living in families with an annual income between 150% and 250% FPL.  Because the parent’s adjusted income falls within the income range to qualify,  the child is eligible for coverage through Medi-Cal, leaving the parent as the only uninsured household member.    

ObamaCare mandates that eligible individuals and households pay a share of their monthly premium cost.  The amount is based on a sliding scale relative to a percentage of annual income. Using the law’s guidelines, Rhonda’s client should pay approximately 8.05% of his annual income, or $3,230 ($269 monthly) towards his premium cost. Covered California gave the parenta $2,820 premium tax credit, which he applied towards a less expensive bronze level healthcare plan.  His monthly out-of-pocket premium cost is $26.00, less than 1% of his annual income. According to the Kaiser Family Foundation’s Subsidy Calculator, Rhonda’s client should have received an annual subsidy of $992 ($82 monthly), while the Zane Benefits online calculator estimates the parent’s monthly out-of-pocket premium cost should be $249, which aligns with ObamaCare guidelines.  Because Covered California does not provide any details on how the premium tax credit is calculated or what the value of the relevant benchmark plan is, Rhonda is unsure whether her client’s tax credit was determined based on eligibility for one individual, a family of 2 or a family of 4.  The Kaiser and Zane calculations suggest Covered California gave Rhonda’s client a higher tax credit than he should have received.

Even when her clients choose plans with low premiums, Rhonda reports many feel trapped.  The bronze coverage plans offer the cheapest monthly premium but have a high deductible, while the silver coverage plans have a lower deductible but a higher monthly out-of-pocket premium cost.  Rhonda reports that many of her clients cannot afford the silver level premium cost and opt for the bronze level plan because of the cost, even though they forfeit the cost-sharing subsidy, another benefit provided for under ObamaCare.  The cost-sharing subsidy gives financial assistance to help defray the cost of copayments and other out-of-pocket medical expenses, but the subsidy is available only to qualified silver-level coverage plan enrollees.

Covered California allows qualified households to select either a family plan that covers all household members or choose separate plans for each household member.  Rhonda recounts oneclient who lives with her daughter’s family and is counted as a member of the household.  The household qualifies for the premium tax credit and Covered California offered the woman an individual platinum level coverage plan with a $1.00 monthly premium. As the woman’s agent, Rhonda was not provided the specific details on how the woman’s portion of the household tax credit was calculated or why the woman was offered a platinum plan with such a low out-of-pocket cost.

Under ObamaCare, an applicant’s assets or property holdings are not considered when determining eligibility for the premium tax credit.  Rhonda reports she helped one low-income client apply for and qualify for the tax credit through Covered California, even though the individual owns an expensive home in an upscale part of town.

Despite the Obama administration’s insistence that low-income individuals and families will benefit from state exchanges and the expansion of Medicaid programs, Rhonda reports some of her clients refuse to apply for Medi-Cal, even though they qualify. Her clients instead want the choice of selecting a healthcare plan and paying a premium (for themselves and their children). But Covered California does not give them the option.  Once the website determines a family or household member is eligible for Medicaid, the application is automatically redirected to the state’s Medi-Cal administrator for processing and the website shuts down all other enrollment options.  As an alternative, Rhonda has helped some of her clients purchase healthcare plans from the private market.  There are good reasons why people avoid Medi-Cal.

When Rhonda called Medi-Cal’s customer service center to check on the status of a client’s application, the representative informed her the backlog for processing new applications was six to eight months.  When she asked the representative what her client should do in the meantime, the representative suggested she go to a local healthcare clinic.  Rhonda reports she has spoken with others who are also waiting for their Medi-Cal applications to be processed.  Many told her they have gone to local healthcare clinics but have been refused treatment because they did not have an insurance card. Rhonda has also spoken with individuals who were previously enrolled in Medi-Cal but are currently uninsured because they were required to reapply for the program -- they are also waiting for Medi-Cal to process their application.

Rhonda states she spends hours on the telephone calling state agencies trying to get information and guidance. Often she is transferred from one department to another -- in those rare occasions when Rhonda finally gets through to an agent, she is told they don’t have the answer. Rhonda is frustrated with the entire process, stating her only goal as an insurance agent is to try to “help people choose the best plan for their needs from those offered on the website, whether they are bronze, silver, gold or platinum.”  She has stopped accepting new clients because she says the effort is not worth it.

The firsthand experiences of an insurance agent in the trenches expose the chaos and confusion of applying for healthcare insurance through Covered California.  The application process is not transparent -- even certified insurance agents aren’t provided basic information for their clients.  The amount of premium tax credits individuals and families receive is inconsistent with ObamaCare guidelines.  Low-income individuals and households who want to choose a healthcare plan through Covered California are denied the opportunity and instead are herded into Medi-Cal. As the White House continues extending the deadline to enroll for healthcare coverage, Rhonda’s stories reveal the harsh realities of ObamaCare, a failed healthcare law that is harming the very people it purports to help.

Constance Jacobs is a freelance writer and blogger living in Oakland, California.