The ACA Exchange Poster Child – Covered California: Works for some, not for others

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California, has long had the reputation as being one of the most progressive, or liberal, states in the nation. Often in a neck and neck battle with New York over who gives more free-stuff to its people at any given time, California long ago adopted the philosophy that what is good for some should also be good for all. The concept of income redistribution though higher taxes is not a new one for California residents.  Yet this state, nicknamed “the Golden State,” and home to Hollywood, Biotech, Oil and Silicon Valley fortunes often confounds because there are also strong anti-tax forces that from time to time rise up and limits California’s spending power through measures like Proposition 13.

California is home to so called Crazy Liberals like the younger Jerry Brown, nicknamed “Governor Moonbeam” during his youthful term, and conservatives like Ronald Regan.  Perhaps the best example of California’s bifurcated nature is the current incarnation of Edmund G. “Jerry” Brown.  While starting life as a strong progressive liberal in his first term as governor, his experience after those years, including a very successful term as Mayor of Oakland, re-forged Governor Brown to a more pragmatic leader.

California, will never be Texas, Mississippi, or Wisconsin.   California will always be a place that while not unfriendly to business will be one of those places that simply cost more.  California will also be a place where federal programs like the Affordable Care Act, the ACA or Obamacare, will be readily embraced by a significant percentage of the population; either as a result of their socio-political beliefs and willingness to let government provide for the less fortunate or because they are themselves the less fortunate who either want or desperately need the access to the wealth of others in order to survive. The ACA exchanges are another example of California’s progressive bent. California was one of the first to begin development of their exchange, and was one of the first to have their exchange up and operating.  As a result of this aggressive committed approach, California’s exchange system, called Covered California has been touted as the shining example of success of ObamaCare exchanges. The good thing is the data systems work much better than the federal exchanges! But as you will see in the interview below, they are not perfect.

I have a friend, we will call him JB, who is well ensconced in the high tech industry. He is not a partisan in any extent of the word.  He is one who excels at what he does, has been an entrepreneur a few times and is well versed in the vagaries of developing systems, the difficulty of launching new sites and new products and recognizes that things do go wrong. So he has the background to expect some difficulty and to not be unreasonable in his demands and concerns. He has been attempting to sign up for insurance since the October launch.

 Here are excerpts of our recent discussions.

TL: I understand you are embarking on an adventure to get insurance under the new mandate, tell me a bit about what made you start of this journey.

JB: This all started when I received a notice  from my current insurer that my policy did not meet ACA minimum standards and that they were not going to participate in the California exchanges, and the company was not going to offer individual insurance in California in 2014.  They said that they might come back into the market in 2015 depending on how the exchanges go, etc.

I initially signed on for an account on CoveredCA in the middle of October.  There was a lot there.  My current plan cost me $1733/month and had pretty low co-pays for doctor visits, drugs, etc. and about a $5000 out of pocket maximum before they paid for everything.  I’ve been pretty happy with the plan for the last two years and it has covered quite a lot of expenses for me and my family.  What I found was that to get a plan that was “close” to my current plan in the way of copays and day-to-day coverage that I was going to have to buy a “Platinum” plan.  The problem was that the premium was going to increase from between $2100/month to $2300/month depending on which plan of the 4-or-5 that I picked.  In addition to the increase in monthly payments I would also have to absorb an increase in the out of pocket max to $8000 and “moderate” increases in copays (i.e. a primary doc visit went from $20 to $25).

(Author’s note: This gets confusing between all the numbers and JB’s experience is slightly below that of the average but, the average total annual health care cost for a family of four with all premium payments and costs added, through the exchanges with no subsidies, now is topping $17,000 per year. A significant increase over the $8,500 it was in 2010)

To get a plan that was similar in cost I had to drop back to the “Silver” level.  But at this level there are very large increases in copays to $45 for a primary care visit, large deductibles and a massive increase in out of pocket max to $12,700/year.

I looked at dropping back to the Bronze plans but the difference in monthly cost didn’t justify the lower coverage especially given my health care consumption history over the past two years.  I would have easily consumed the monthly difference if my day-to-day usage were the same as last year.

TL: You told me you modeled the costs, can you tell me what you did to get a handle on this?

JB: To help figure this out I downloaded from my current provider the two year history of my health care consumption.   I then put these into an EXCEL sheet and used that sheet to predict what my costs with the Silver, Gold and Platinum plans would have been if my health care consumption was the same as last year.  I also modeled if I had a “catastrophic event” what it would be.  The results were that if I choose the Silver plan  over platinum I save roughly $4000/year if my consumption stays the same and it will cost me about $1000 more for the year should I have some kind of “big” event.   So the Silver plan was the obvious choice for us.

TL: How difficult was it for you to get the information and create your own model?

JB: That took me the first two weeks to get all of the data, build the model, etc.  This was actually pretty easy.  The “window shopping” on the CoveredCA website was pretty good, they had rough estimates of cost that I could use in the models and my current provider was good enough to give me access to the data from the last two years.

Then came the fun.  I created my CoveredCA account, started to do the application process.  It was overwhelmed with errors.  Things like, text not rendering right on the screen, things overlapping on the screen, links that go to places that don’t exist or “you don’t have the privilege to go here” etc.  The web site was clearly not ready for prime time when it went live.
TL: This is consistent with what I have heard from others.

JB: As you know, I have been in tech for my whole life so I’m familiar with these kinds of startup glitches but let me tell you some of the weirder things:

The site asks you to upload a bunch of stuff as part of the application.  Copies of your driver’s licenses for all in the family who have them, school IDs, proof that your insurance was cancelled, and a few other things.  What’s interesting is as part of this process I had to upload a copy of the letter from our insurance company for me, my wife and each of the kids.  One would think that one copy of the letter would be sufficient but that was what the site wanted.

The upload process was also fraught with errors.  I had to upload about ten documents.  After every 2-3 the site crashed, I was kicked out, I had to log in from the beginning, answer a bunch of questions that I already had answered and then could upload the next 2-3 only to find it crashing again.  But, after a lot of time, effort and irritation I did finally get through that and got the documents loaded.

At some point during the process I must have typed a wrong password a couple of times and my account got locked.  This was somewhere around the third week of November.  I have yet to be able to get back into my account.  There is no password recovery process, all I get is a box that says “you are not authorized to log in.”

TL: Did you call on the phone and speak to representatives?

JB: I’ve spoken to people on the phone, I’ve chatted in the on-line chat and have submitted email requests but no one can resolve this issue.

The phone system is a joke.  When you call the line is busy.  If you actually get through the wait times are ridiculous.  At some point they stop counting how long your wait will be and tell you that your wait will be “more than 30 minutes”.  There is no call-back mechanism and no way to schedule a time to talk to a human.   In all I called 4 times, my average wait time was about 40 minutes with one wait as short as 27 and the longest about 50 before a person answered the phone.

The chat system is even worse.  I experienced the chat system counting down from my starting position at 200+ in the queue to the point when I was next and then it responded “there is no one to talk to you” and ended the chat.    This did not just happen once, it has happened to me at least a half a dozen times.

I have submitted two email tickets, both were followed up with an email telling me that someone would call me within 2 days.  I have yet to receive a call.

TL: So what was the nature of your prior plan?

JB: My prior plan was a COBRA plan from United Health Care that I was intending to convert to a new plan in the exchange. While my first visit to the exchange was distressful, I want to note one thing, there is one positive that came out of this process so far.  The EXCEL modeling that I did showed me that I was “over insured” in the past.   I was paying higher premiums to get low copays but given my actual consumption I would have been much better off with lower premiums and a higher copays.   The process, because of the massive sticker shock on an equivalent plan, forced me to take a good hard look at what I was buying. 
TL: So how is your quest for insurance going now?

JB: My odyssey continues!

I have had two major issues with CoveredCA in the last month and still don’t have health care.  The first is that for some reason the CoveredCA folks treat your tax status different than the IRS.  As an example, it asked if I claimed my wife as a dependent and if we filed married/joint.  I answered yes to both.  Bzzzt, wrong.  If we’re filing jointly then she is not a dependent.  That caused all kinds of errors.  

TL: Now that’s an interesting interpretation! Tell me more about the process did it get easier?

JB: Not Really, Other questions expected nice exact answers.  For example, a surprising question, “How much will you make next year?”  As someone who is running a startup that has not been funded, I have no idea.  I can guess but they want you to swear under penalty of perjury that you’re telling the truth.  That makes me nervous.  And the answers make a difference.  

TL: I can see why, they would make me nervous as well. Tell me more about your odyssey.

JB: Second, somehow the system decided that my wife and I, and my one son, were in an ACA plan and my other son was to go on MediCal.  No one can figure out which question we answered that made that decision for us.   That’s NOT what I want, I want the kids to have the same doctors so that we don’t have to manage the paperwork for multiple places.  That is in the system with a trouble ticket that hasn’t been resolved as of 11/26/13.
TL: Have you found out want caused this problem and more importantly have you gotten your son back on your family policy?

JB: I still have no idea how my son ended up on MediCal, but on one phone call we discovered the wife-as dependent thing, that I told you about earlier.  That could have done it, but in one of the rare occasions I got to speak to a person on the other end of the phone, they call kept telling me that this should not be happening.  They changed more things in the application (since I could not get in) and eventually it went away.  But, I never was informed of that they changed that fixed it so I have no idea what the problem was.
TL: What else happened?

JB: Third, and this is the best.  I somehow got locked out of the system.  If I try to log in it says “you are not authorized to log in” and kicks me out.  No chance to recover or reset my password, just a message to call the number.  I’ve called at least a half dozen times, I have 6 open trouble tickets, I’ve waited on hold for at least 5-6 hours, and no one has been able to resolve my issue.  I have asked that my account (1) be unlocked so that I can use the existing password, (2) my account be unlocked and the password reset with a new one with a link sent to my email of record and (3) that I be able to create a new account.

TL: So have you been able to create a new account?

JB: No, It would not let me create a new account since I’ve already used the SSN that I have.  But, a person who I did get on the phone said there is a way to create a new account and link it to the old one but the “access code” that the web site asks me for is “not able to be generated at this time.”  So, I have not been in a position to fix the account myself.
TL: Amazing!

JB: Meanwhile I go onto their online-chat to talk to people, I get in line at #272, wait 45 minutes until I get all the way down to #2 and then it gives me a message that says “no one is able to handle this call right now,” with the option of leaving an email (that goes unanswered) You can’t call, if you do you get a busy signal, and even when you do you get it to ring and get connected, you have to wait nearly an hour.  It’s a damned mess.  And, California is supposedly the shining star of the web sites.

TL: Well, for what its worth, I hear from many others in Washington DC and elsewhere in the country, that the Federal Exchange, and most of the others states exchanges, are much worse.

JB: I am incredibly frustrated.  My former plan ends on 12/31/13, there is no way to renew it because not only did my former company’s insurance company not continue to offer my plan, they chose to not offer ANY plans in the individual market in California for 2014.  Oh joy.  

TL: Well that kinda blows the myth that if you like your plan you can keep it.

JB: My latest trouble ticket has a call back by 10:00 am on 12/10.  I’m not holding my breath.  Update: JB says they never called.

This was a follow up e-mail I received from JB later in the day!

JB:  By the way, I spent an hour and a half on the phone today, one hour of it actually talking to someone, and got signed up for a CoveredCA plan.  The guy on the phone says that a typical call lasts between an hour and an hour and a half, but since I had done some of the work before being locked out I was on the light side. They still don’t have a way to re-enable my account so any changes I want to make I’ll have to call. –Absurd!
This was from a later e-mail exchange.

TL: In the end what conclusions have your drawn about this system given your experience, background and needs?

JB: In the end I think that the best solution for this health care crisis is allowing people to contribute pre-tax money into a healthcare spending account that continues to roll over into the next year as long as there is money and then offering catastrophic/high deductible insurance.  This allows people to even out the cost of their day-to-day healthcare, small high-cost events through the spending account and prevent people from going broke if something really bad happens.   What we have built with the ACA is high premium plans that are essentially a catastrophic policy (with high out of pocket costs) with a prepaid health care plan.  This ENCOURAGES over use, i.e. I already paid for it so I’m going to go use it, which the system can ill afford.


While JB may not be typical of the Covered California experience—we will never know because these details are not published—they are much more typical of the experiences in many other states and in the federal exchanges.  Lest people begin the inevitable retort, “But, the exchanges are improving rapidly and the Affordable care act is bringing benefits,” please refrain.  The debate will not resolve.  Clearly, the ACA, ObamaCare, is bringing significantly lower premiums to people who gain subsidized care.  It is driving significantly more people into MediCaid.  The ACA has already had a major impact on the dialog over what is good healthcare.  What the ACA has not yet done is lower the cost of care of most of American’s, lower the aggregated cost of care for America as a whole, improved the quality of care for Americans or provided us yet a roadmap how we will gain from this legislation.  It may do this and it may not.  Proponents remain optimistic and critics skeptical, although some proponents have moved into the skeptic category.

In the end the debate is moot anyway. What started as the Affordable Care Act, as it is now being implemented, is only a shadow of its legislative self.  Its stated goal, “as the path to a Federal Single Payer System,” now seem extremely remote, its goal to eliminate disparity of care has already had the opposite effect driving many practitioners and hospitals, estimated now at over 50%, not just away from Medicare and MediCaid but insurance based reimbursement as well. Many now have moved into the world of “retail” medicine?  The cost for the larger “insured” population, including Medicaid & Medicare, will soon cause significant restrictions not in the breadth of diseases covered, but in the extend of coverage.  Fewer doctors, fewer hospitals and fewer prescriptions covered will be just one part of the formula to lower costs.  The next shoe will not be “death panels” it will be limits to treatment.  You have breast cancer, no problem. We will remove the lump or breast!  Reconstruction is not an option in your plan. You have a suspected prostate cancer, we will put a watch on the mass, at some point maybe do a biopsy, and when we are sure it is cancer, and it will kill you before you die of natural causes, we will remove the prostate.  If you want incontinence therapy or treatment for erectile dysfunction you can use your Health Savings Account.

These are not suppositions nor is it an attempt to scare people.  It is just the facts as they are unfolding. We will be forced to make such decisions or these decisions will get made for us by economic collapse.  It is little more than the interplay of exponential math of population growth and the linear, additive math of support services required.  The math has been known for centuries and it is inevitable.

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