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21 Feb 2014

Opting Out: Meet Some Coachella Valley Residents Who Are Saying No to the Affordable Care Act's Insurance Requirement

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Michelle Brodeur makes regular trips to Mexico for her eyeglasses and contacts.

At 50, the self-employed graphic artist and writer is in good health. That’s a good thing, too, because Brodeur hasn’t had health insurance in nearly a decade—and her uninsured status isn’t about to change any time soon, despite the roll-out of the Affordable Care Act.

Brodeur, who earned about $23,000 last year, said she makes too much to qualify for free or reduced-cost Medicare or Medi-Cal, expanded under President Barack Obama’s signature health-care reform effort, dubbed “ObamaCare.” With insurance plans that she considers decent starting at roughly $175 per month for her, Brodeur said her premium would be too big of a financial bite.

So, Brodeur said she’s opting out.

“If it was $95 or $100 a month, I’d be able to manage,” said Brodeur, who lives in Palm Springs, where the median per-capita income is $36,627. “It’s a conundrum. I’ve not had insurance since I lost my job nine years ago.”

Early efforts to get people to sign up for insurance under the controversial law got off to a rocky start with lagging enrollment numbers, after much-publicized glitches at healthcare.gov. (California’s signup site, Covered California, at www.coveredca.com, worked much better, though it did suffer through some glitches.)

The fine for opting out this year is relatively small—$95, or 1 percent of a person’s income, whichever is greater. But the fine incrementally increases to $695 by 2016, or 2.5 percent of a person’s income. After 2016, the penalty is indexed to inflation.

Brodeur’s far from alone when it comes to opting out.

The UC Berkeley Labor Center estimated in a 2013 report that nearly 4 million Californians under the age of 65 this year will be eligible for health insurance, but will not get coverage. The reasons vary.

“Any time coverage has expanded in the past, it’s taken at least a few years for enrollment to scale,” said Laurel Lucia, a policy analyst at the University of California at Berkeley Center for Labor Research and Education. “As people figure out the system and the system improves, more people will get coverage.”

Some opt out simply because they do not qualify for Medi-Cal or the exchange subsidies. Others find the enrollment process confusing and cumbersome. About a million will be ineligible because of their immigration status. And roughly 400,000 Californians will find the exchanges, as Selena Solis has, unaffordable.

The 19-year-old Columbia College Hollywood student said she hasn’t decided whether she’ll get insurance or pay the fine.

“I’m still debating whether or not I should,” said Solis, who graduated from Palm Springs High School in 2012. “I work two jobs. I just can’t fit another bill into my budget.”

The Obama administration has struggled to sign up young invincibles like Solis. She’s a prized demographic, among the people age 18 to 34 who are relatively healthy and inexpensive to care for—and who are necessary for the pool to subsidize older enrollees.

“I understand that it’s for my own benefit, but what if it’s something I really just do not need at the moment?” Solis said.

Experts say about 40 percent of enrollees need to be young and healthy for Obama’s signature program to succeed.

In three months since the October roll-out, 23,417 Riverside County residents enrolled in the health-care exchanges, according to Covered California, which released a report in January. That number is 58 percent of the 40,377 the agency expects to enroll during open enrollment, which began Oct. 1 and ends March 31. Of the counties highlighted in the January report, only Fresno and San Bernardino counties had a smaller percentage of the uninsured enrolling compared to projections, with 47 percent and 45 percent, respectively.

“We are focusing in a regional campaign to increase those numbers in those counties,” said Edith Lara-Trad, a Covered California spokeswoman. “The good news is that we have (more time) to work on this.

“We are very confident that we are going to reach those numbers.”

Latinos, African Americans and the young are being targeted for the agency’s outreach and education efforts, Lara-Trad said.

In the first three months of the enrollment period, more than 500,000 people statewide—86 percent of the six-month projection—had enrolled in plans through Dec. 31, the agency reported. 

Covered California is the state’s health-care marketplace, created under the Affordable Care Act to offer coverage to the uninsured.

The Congressional Budget Office estimates 6 million Americans will pay the opting-out penalty in 2016. It is unclear how many will elect to pay the fine this year.

An estimated 48 million Americans—or nearly 16 percent of the nation—were uninsured in 2012, according to the U.S. Census Bureau.

In California, an estimated 7.3 million people—or roughly 19 percent of Californians—were uninsured, according to a 2012 report by the California HealthCare Foundation.

Signed into law by Obama in 2010, the Affordable Care Act was enacted to insure more Americans and lower skyrocketing health-care costs. It represents a significant overhaul of the U.S. health-care system, the first since 1965 with the passage of Medicare and Medicaid.

“It’s a shitty system. I understand what they’re trying to do. I just wish it had been a single-payer (system),” said Brodeur, referring to a health-care system paid for by the government rather than private insurers.

“They did it wrong, in the spirit of compromise.”


About the penalty

For the Affordable Care Act to work, it requires everyone who can afford health insurance to purchase health insurance. Those who don’t will face a penalty.

In the first year, the penalty is $95 per adult and $47.50 per child, or 1 percent of the yearly household income, whichever is greater.

That fine jumps incrementally over the next two years, to 2 percent, or $325 per person in 2015; and 2.5 percent, or $695 per person, in 2016. After 2016, the penalty is adjusted for inflation.

If you happen to be uninsured for part of the year, one-twelfth of the penalty applies to each month you’re not covered.

After open enrollment ends March 31, no one will be able to get health coverage through the marketplace until the next annual enrollment period, absent a qualifying life event such as moving to a new state, getting married or divorced, or having a child.

Source: healthcare.gov


By the Numbers

The Affordable Care Act was an ambitious and historic piece of legislation signed into law in 2010 to extend health insurance to uninsured Americans in 2014. In California, officials estimate the new law, which requires individuals to purchase or otherwise acquire health insurance, will lead 4.6 million people to enroll.

Here’s a look at the uninsured and enrollment in California:

  • About 7 million Californians were uninsured in 2013.
  • 6.4 million Californians received Medi-Cal insurance in 2013.
  • More than 1.6 million Californians have signed up for coverage via Covered California, Medi-Cal or Medicare through Jan. 31.
  • Young invincibles are enrolling at a rate of about 26 percent. Healthy 18 to 34 year olds represent about 25 percent of the state’s population.
  • Latino enrollment statewide is about 28 percent. Even still, two-thirds of Latinos are estimated to remain uninsured, although they will comprise roughly 45 percent of the state’s population in 2020. Latinos remain a key demographic because people of color are more likely to be without health insurance.

Source: Covered California, UC Berkeley Labor Center, Kaiser Family Foundation.

Editor's note and correction: A previous version of this story said that plans for Michelle Brodeur started out at $175; actually, basic plans for Brodeur would start out at around $75. Brodeur researched a variety of health care plans with differing salary ranges through Covered California, looking for the best deal. The $175 monthly premium she found was the amount she most readily recalled, not the cheapest plan. Having recently again gone over her options, Brodeur said she will still opt out of purchasing a health care plan through the exchanges in 2014.

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