Covered California: 3 Key Issues to Consider Before Taking the Plunge

Saving money is a good thing.

But…

We’ve all been the victim of a good deal gone wrong haven’t we?

You know what I’m talking about – You find something for a reduced price, and everything looks pretty good… Slowly but surely, however, you find youself investing more and more time to make it work…. Only to realize this wasn’t the best decision after all… Your total investment (money, time, aggrivation…) has exceeded the value of the deal. Whether it’s a used car, a cheap electronic gizmo, or even health care, we’ve all been there. The law of diminishing returns comes to mind…

Many Covered California enrollees are starting to question if the subsidy assistance they receive is really worth the time and headache. 

While subsidy assistance has, without a doubt, helped many people gain access to much needed health coverage, there are a surprisingly large amount of individuals who are starting to question whether or not these subsidies are worth their time and headache. Before you register through Covered California, please consider how the following 3 factors will be affected:

  1. Your Time

The first hidden cost of registering for coverage through Covered California is the value of your time.

Why is this? Let’s talk through the process. First, prior to registering for Covered California, you need to have a firm understanding of your Household Adjusted Gross Income… For the coming year. In other words, you need to know with relative accuracy, what your household’s line 37 will be. Stating an incorrect number for this figure will result in problems later on your taxes and possible penalties.

Filling out a lengthy online application, discussing future earnings and deductions with your accountant, and submitting various documents to Covered California’s portal are all examples of time-sucking aspects of going through the new exchange. On top of all this, maintaining coverage with Covered California can also be a stressful and time consuming situation…In particular, mail and email communications from Covered California must be managed and responded to in prompt timing, ensuring your coverage is not dropped for failure to prove present income, citizenship, or other data…

Did I mention that the example above applies only when things go perfectly? For many, this is only the beginning.

  1. Your Money

While the value of your time might not have a dollar figure attached to it, I can tell someone who’s time does…. Your accountant.

Not only will the income questions imposed by the Covered California process likely require you to speak with you accountant before registering, racking up billable hours along the way… But you can expect a substantial increase in the complexity of your accountant’s job at the year’s end. This means more money invested on your part.

  1. Your Doctors

Simply put, Covered California policy holders are experiencing more difficulty finding hospitals, doctors and specialists. Why? In many cases, these plans are offering less compensations to physicians for the services they perform. Additionally, there is increased risk that members with Covered California could be cancelled – knowingly or unknowingly. Not to mention, the increased risk that a Covered California policy could be delinquent on payments due to the longer “grace” period instituted by federal law on all plans receiving subsidy assistance… For more on this, Click Here to see the following pdf from the American Academy of Family Physicians.

Conclusion:

Ultimately, you must do what benefits you and your household. My hope, is that you would pursue your coverage taking into account the total cost of registering for coverage through Covered California.

– Nolan Waterfall

About the author: Nolan Waterfall
Nolan serves as a consultant, both to SCI, and within his own brokerage, Campfire Health, where he enjoys educating owners, C-level executives, and HR managers, on the in's and out's of all things compliance, technology, and benefits strategy. Nolan loves reading, anything outdoors, and spending time with his wife Joanna.

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