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In California, Obamacare Begins Despite Government Shutdown

October 1, 2013 1:12 p.m.


Peter Lee, Executive Director, Covered California

Jennette Shay, Director of Government and Community Relations, Family Health Centers of San Diego

Gary Rotto, Director of Health Policy, Council of Community Clinics San Diego

Kamal Muilenberg, Executive Director, San Diegans for Healthcare Coverage

David White, Health and Life Insurance Broker

Related Story: In California, Obamacare Begins Despite Government Shutdown


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: Now our top story on Midday Edition today, this is the day buying health insurance in the U.S. undergoes a fundamental change, the rollout of the Affordable Care Act begins today. And individuals can begin to buy coverage through newly formed insurance exchanges. The exchange in this state is called covered California. Today, we'll devoting our show to the rollout and effect in California and asking for your comments. Now, in the first part of our special, we're taking a look at what you and your family need to know about signing up for Obamacare. I'd like to welcome my guest on the phone, Peter Lee is executive director of covered California. Welcome to the program.

LEE: Great to be here. Thanks for having us, and thanks for having this show. It's an important -- open for business, helping people enroll. We have had at some point a response time that is ideal that we're open enrollment people. We've got people on the phone helping to any enroll today, even though you don't have to enroll today. You've got three months to enroll for coverage that can take effect on January one. We've been thrilled with the response. This is the starting line.

CAVANAUGH: Right. And you touched on a question I wanted to ask you. If someone is checking out the website and is having a hard time figuring out what they need to do, are there one-on-one resources beyond the California connected website?

LEE: There sure are! That's a great question. If you want to use our website,, and you can enroll A to Z online. You want help by a person? Call up! All the 800 people. You want to stalk to someone in your community, literally thousands of licensed insurance agents have been certified by us, more and more are being trained and certified every single day. So we're to 10,000 certified. Now there's thousands more. You can go to a county office in San Diego help you out, or see if you're eligible for the premiums. And finally we're in the process of training thousands of certified enrollment workers across the state. And it's important to note for all three of those sources, they're certified by us. They're fingerprinted, they're background checked. California's consumers know they can trust and rely on these people when they share with them.

CAVANAUGH: Thank you so much, Peter.

LEE: My pleasure. Thank you for having this show. This is the beginning of an historic change with healthcare being a right, not a privilege, not just in California but across the country. It's a big degree.

CAVANAUGH: You're welcome. And we are taking your calls during this program. Gary roto is director of health policy at the council of community clinics in San Diego. Welcome to the program.

ROTTO: Hello, Maureen.

CAVANAUGH: And Jennette Shay with family health centers of San Diego. Welcome back.

SHAY: Great to be here.

CAVANAUGH: Now, Gary, a major reason for the Affordable Care Act is the rising number of Americans who have no healthcare coverage. How many San Diegans are we taking about?

ROTTO: We estimate that a little over 500,000, probably about 525,000 San Diegans, individuals who don't have coverage right now. Buff many will be able -- but many will be able to benefit from the programs we're talking about.

CAVANAUGH: And basically, how does the Affordable Care Act help people who have no coverage now get health coverage?

ROTTO: Two ways. One, if you are a single adult, a low-income individual, below a certain level, you're now able to get Medi-Cal. The expansion would be January 1st. Above that, if you make $15,000 to $45,000 as an individual, up to $95,000 as a family of four, you're able to get coverage going to the marketplace and get a subsidy to purchase the insurance.

CAVANAUGH: Many people have not been able to get insurance not because of the cost but also because of previous health conditions. Any physical exams or anything like that?

ROTTO: No, besides the expansion and the marketplace, covered California, adjust in general, the whole concept of insurance has changed. Whether you call it Obamacare or the Affordable Care Act, you no longer have the preexisting condition clause. You're not worried about if you have something or are disqualified or if you come down with know an illness. That's off the table. It's strictly your age, your family size, and where you live. That's how you determine your cost for your premium.

CAVANAUGH: Janette, in the past, it had been rather difficult for low-income people to qualify for Medi-Cal coverage. Can you explain to us how this service has been expanded, and do you think that is going to change the reputation and the idea of what Medi-Cal is?

SHAY: Absolutely. This is a big day and a big change for Medi-Cal. Currently in the past, in order to be eligible, you had to have children, and particularly young children in order to qualify. With the Affordable Care Act, that's exchanging so that your eligibility for Medi-Cal is based solely on income. So this means for adults that have children, that do not have children, that have grown children, they're going to be eligible for Medi-Cal coverage for the first time. And I think it's a great change. And I think many people assume if you were low-income you'd be eligible for support. But that in fact was not the case in the past. It is the case today.

CAVANAUGH: I have to admit to you, some of my friends, some people I know say, well, I might be now eligible for Medi-Cal. And they're kind of hesitant about that because they think maybe the care is substandard or there's some problem with that. Can you explain first of all why people feel that way, and if that's true?

SHAY: I think there's always misperceptions sometimes about government programs that are unknown or people are unfamiliar with. But the truth is that Medi-Cal is an insurance coverage program. It's not actually a medical provider. So when you enroll in Medi-Cal, you get to pick your provider. You can pick family health centers of San Diego, a host of community clinic, private practitioners. Medi-Cal is accepted by all of our major healthcare systems here in San Diego. Whether you're a Scripps or Sharp patient, you can access those hospitals or UCSD. There's really nothing to be afraid of. And it covers your basic services. The doctor, the hospital business the prescriptions.

CAVANAUGH: Does it cover you will your health expenses?

SHAY: Like every insurance plan, there's always some fine print. It will cover in general what people expect health insurance to cover. For example, there might be some things in dental care that are not included. Basic care is, but not every procedure you would want. But when you need to go to the doctor, to the hospital, your basic prescriptions,s why. But similar to an HMO, they might not cover every brand name prescription. But we would find the Medi-Cal system pretty robust.

CAVANAUGH: And how do these subsidies work? Do you have to prove your income to get a subsidy?

LEE: You declare it upfront, it'll be on the website when you sign up, and then you're able to use the tax credit. If you're eligible for a tax credit, it'll tell you then, and you'll be able to apply that to your premium.

CAVANAUGH: Do you have to wait for the next year's taxes?

ROTTO: You'll be applying it right away, off your monthly people income, it'll be distributed to the health plan. So that you only have to pay your particular cost

Not the extra amount and wait for a rebate later.

CAVANAUGH: Do we know how much the premiums might be for the average family in California or --

ROTTO: No, the question is what's an average family. A family of four, I think I've seen a number of $375 or so. But it really depends upon age and the number of family members that are part of your family.

CAVANAUGH: How many plan options do San Diegans have?

ROTTO: There are six plans. And some of them even have a difference between an HMO and a preferred provider. Some of them have a network that is their preferred network, and some of them a larger network. So many different options that San Diegans have. And even for imperial county, there are three different options.

CAVANAUGH: And Janette, you talked about dental coverage. Are dental and vision -- is that covered in a lot of these plans being offered through the health exchange?

SHAY: It's covered under Medi-Cal. Under the health exchange, there are some other add-ones. And I want to put a plug in for our community health centers here in San Diego. We have a robust network of dental and vision centers offered through the exchange.

CAVANAUGH: I think a lot of people are really concerned about the idea that this is a mandate, that people have to have health insurance now. People have until March 31st to buy insurance or pay a fine.

LEE: The nine in the first year is $95, or 1% of your gross, whichever is higher. And it'll go up over several years.

CAVANAUGH: How much to?

LEE: I believe the top, after year three, is $695.

CAVANAUGH: But somehow there's also a provision that if it is unaffordable to you, you do not have to pay a fine. How would that be determined?

LEE: That'll be determined via the covered California website. Some of it has to do with are you already offered insurance we your employer and does it exceed a certain percentage of your gross income? If it does, the maximum of any level is 9%. Then automatically that's considered unaffordable, and you can purchase coverage in the exchange. There are other exemptions for folks that are members of Native American tribes, and other various smaller exemptions.

CAVANAUGH: And I mentioned that, that people who are here illegally are not eligible to enroll in the Affordable Care Act or California exchange. But how about a family where the kids were born here but the parents were not?

SHAY: That's a good question we're getting from a lot of folks. Anyone that's legally here is eligible to enroll. So the children are eligible to enroll. The parents would not be.


CAVANAUGH: And what about the young people who are here illegally but are under the deferred action plan?

SHAY: It's our understanding the state has made an exemption for young people that are part of what we know as the Dream Act. They will be eligible. But like everyone that's kind of in a special category or what we would consider a gray area, we want to encourage them to call us. We'll work with you one-on-one to confirm your eligibility and get your application in.

ROTTO: And two-on-one is a great person with all the clinics too.

CAVANAUGH: 211? And couldn't people still buy insurance coverage? Can they just go and call up an insurance company and get their insurance that way?

ROTTO: Absolutely. They can continue to buy an individual plan from a licensed broker T. Does not have to be a part of the California public marketplace. And many people will continue to receive their insurance from their employer. There will be no change.

CAVANAUGH: That's my final question then. If someone is covered under a group plan where they work, they don't have to do anything?

ROTTO: Not a thing. Just continue to work -- if it's your human resources professional, they're going to continue to provide the information for you and continue the plans that you have.

CAVANAUGH: If you don't like that coverage, could you go to the exchange and find something better?

ROTTO: It depends on whether the insurance provided is considered affordable.

CAVANAUGH: All right. You're going to come back later in the program when we have questions and callers to provide more answers.

CAVANAUGH: Today's rollout of the Affordable Care Act exchanges will have a bigger impact on individuals than on businesses. But that doesn't mean that businesses aren't taking note. Small businesses with fewer than 50 employees now have a 1-stop shop through conferred California to evaluate health plans they might want to offer their employees. And larger businesses that don't already offer health coverage will have to provide coverage or pay a fine starting in the year 2015. For more on how the Affordable Care Act affects businesses, my guests, Kamal Muilenberg with San Diegans for healthcare coverage. Welcome.

MUILENBERG: Thank you.

CAVANAUGH: David White here as well. Health and life insurance broker on San Diego Chamber of Commerce healthcare committee.

WHITE: Thank you very much.

CAVANAUGH: And we'll start answering your calls about the affordable healthcare law in our next segment. Get your calls in now! How does covered California serve small businesses, David?

WHITE: It's basically a marketplace, not discernible than any other marketplace. It offers insurance to small businesses that are less than 50, full-time equivalents. And basically the reason to go on the exchange is either to get a tax credit or to -- if you're, for example, your average salary was less than $50,000, you can get a tax credit.

CAVANAUGH: It you provide healthcare to them.

WHITE: If you provide healthcare. And if you have less than 10 employees, and your average salary is less than $20,000.

CAVANAUGH: And those with less than 50 employees are not required?

WHITE: They're not requireded.

CAVANAUGH: And they won't be?

WHITE: There's thought that will come in in 2016 or 2017, but it has not yet.

CAVANAUGH: We heard about a month delay to use the exchanges but that's not here in California

WHITE: No, we've done our own exchanges. You were talking with Peter Muilenberg earlier, and they hired him to set up and put together a business. And he put together the shop, which is the business exchange, and also the individual exchange, and both of those are up and running. I was on them this morning. I would not say they were running wonderfully, and there were some delays. But I wouldn't be the first one to be on it anyway. I would never sign up the first day anyway because there are always going to be some glitches.

CAVANAUGH: Since businesses with 50 or fewer employees don't have to under Obamacare provide health insurance to the employees, what would be the benefits for such a business to check out covered California and find out whether or not it works for their business? Why would they want to?

WHITE: Sure. Well, it gives them a competitive advantage. If you're a small little start-up or a computer company start-up where basically you're building your business, you want to be competitive. And you want your employees to have benefits. That's why you would do it. If you're a company like a McDonald's, they're going to have a hard time. Because what they've done is they've tied the ownership of one McDonald's, if you own five, you really own all five, you don't just own one. And that's going to put you over 50. You're then supposed to provide insurance. And when you're talking $12, $10 an employee, that's a little tough to do.

CAVANAUGH: Right. We just heard from David that the small businesses who go on covered California health insurance exchange may find that they qualify for tax credits. Tell us a little bit more about that. How does that work?

MUILENBERG: Well, there's a magic formula, it's open to those businesses which have fewer than 25 full-time employees, their average wages must be under $first,000, and the business needs to pay -- 50% of their premium exchange. And in that case, the business owner will be eligible for a credit up to, today, up to 35% of the premiums cost that the employer pays. Starting on January 1st, the only way a small business can get that tax credit would be by going through the exchange.

CAVANAUGH: Right. So in other words, if you have a small business that meets that criteria, and they are offering health insurance to their employees, they could actually save some money through this health insurance exchange?

MUILENBERG: 35% of their cost could come back to them at the end of this year, and it could also do retroactive requests for that tax credit for two years.

CAVANAUGH: David, do you think this would incentivize small business to provide health coverage?

WHITE: I think it will help, but one of the things that you have some restrictions on, just like $50,000 is not a tremendous amount if you talk about a small law firm. They all make more than that. A doctor's office, a dental office, they probably all make that. So you're talking about companies that are a little above the 10-12 hour employees, but they're ruled below the higher level employees. Those are the ones that really can take advantage of them.

CAVANAUGH: Oh, go ahead.

MUILENBERG: I just wanted to say that 60% of the uninsured actually are in small business. And they also are the working core. So they are generally uninsured. So if the business begins to offer coverage, are that would be a boon for them. But as well, they have the option of going into the additional market and accessing subsidies for individual coverage.

CAVANAUGH: What sort of plans are available for small businesses through the exchanges? Are they similar to the same medical services that are offered to individuals?

MUILENBERG: We have blue shield, which offers an HMO and a PPO. Healthnet, which offers a PPO. Kaiser, which has three different versions of their HMO coverage, and Sharp Health Plan. So we had a nice choice of plans here in San Diego. Of

CAVANAUGH: David, might it be cheaper in some instances for an employee to go through an individual exchange and get subsidies?

WHITE: Yes, it could be. When a company who offers insurance to their employees, it has to be affordable. So it has to be 9.5% of their taxable income. If it is, then you cannot get a subsidy in exchange. If you go to -- let's say you work for a company, and they offer you insurance, but it's 15% of what you're making, you could go on the exchange and get a subsidy through the exchange and get your insurance that way.

CAVANAUGH: If you listen to the buildup to the rollout of Obamacare, there has been a lot said about business and even about small business and how this plan might hurt small business. And I'm wondering, if you define small business with 50 or fewer employees, how would it possibly do that since it doesn't really mandate that those businesses cover their employees?

MUILENBERG: For a business under 50, there is no negative. There are no penalties. They don't have to offer insurance. It's a business decision they can make any way they want. And in fact Trader Joe's, well, that's a bigger business, of course, but a small business could also help their employees pay for their coverage perhaps on the exchange through the individual market.

CAVANAUGH: Oh, I didn't know that. So businesses can help their employees pay for their personal insurance coverage.

MUILENBERG: Right. Small businesses, yes.


WHITE: There are some insurance policies out there which are called defined benefit policies. And basically what they say is the owner sits there is goes I can't afford full insurance. But I'll give you $120 a month, $125, $75, X amount of dollars. What happens is the person goes on the exchange, gets their billing from the exchange, takes it to the company, the insurance company sends a check for what the company said, $100, and they pay for the rest of it. So they are getting a benefit, they're not getting full insurance, but they're getting a benefit toward the insurance. And years ago, people did that in business, but not recently.

CAVANAUGH: And what about the bigger businesses? Businesses with more than 50 employees? When does this mandate go into effect, how does it rollout?

WHITE: Sure. It will affect businesses over 50 in that there are some businesses over 50 that probably don't offer insurance. Let's take the owner of a McDonald's, four or five of them, he's going to be in a tough situation. A restaurant chain would also be in a tough situation, four or five. Because they have enough employees that they're supposed to offer insurance, but their average salary is not enough that they can really offer insurance. What happens is they'll offer insurance to some employees, are the ones that could not afford it could go on the exchange. That would put I penalty toward the business of $2,000 because they went on the exchange, and what was offered by the company was not affordable to their employees. So the company would then pay a $two,000 fine, which is not deductible. So companies are going to start to look and say, okay, I can pay a fine that's not deductible. Do I want to have something deductible and give my employees something? What I talk with my companies about is you have to sit down and strategically think about long-term planning.

CAVANAUGH: Is this one of the reasons that the mandate for larger businesses was delayed for a year? To try to figure out how to give larger businesses more options especially if their employees don't make very large salaries, and whatever kind of insurance they could offer them might not meet the criteria of the mandated insurance coverage that it has to do certain things or else it doesn't qualify as coverage for Obamacare?

WHITE: I think that's part of it. I think another part of it is one of the things that people didn't realize is there's about 12 different recording requirements with the new law that come in January 1st. And that's come down on a company of 35, 45 people because they don't have the HR departments to handle it. But all companies are supposed to do that reporting, whether you're required to do insurance or not. So they decided to take that mandate off to alleviate some of the pressures. And there's been increased -- many people have seen as of January 1st of this year, when you got your salary, they took out a little bit more for Medicare. They took out a little bit more for Social Security. All those remember tied to the new law. So the little things are kind of chipping at it. So there's a lot of different thing in the reporting requirements.

MUILENBERG: And one point though, are the penalty rules do not apply until 2015 either. And they may look very different in a year because they are revealing.

CAVANAUGH: A work in progress.

MUILENBERG: Yeah. I agree that I think for businesses especially 50 to 100 and the service industries, there needs to be some redefinition of what they have to do and what's the best for their employees.

CAVANAUGH: I'm wondering, what have you been hearing from small businesses in San Diego?

MUILENBERG: Well, I've been talking to a lot of small businesses through the various associations. And they're really surprised that they really have choice here, that there are no penalties. So it's really important to get that message out so people aren't so worried about it. So that's been one thing. The other thing is I've always found that businesses want their employees to be covered. They wish they could afford to provide coverage. So now with the individual market in the exchange as well as the shop, I think businesses have more options, small businesses under 50 have more options of how they bring benefits to their employees.


WHITE: Well, I think I'm hearing from a lot of people that don't understand the complexities of the whole plan. I heard someone

Our industry who said if you took when we did Social Security, when we did Medicare, if you took when we did the hippa law, all those laws together, they would still not even be close to as large as this law is. So we're talking about the largest and the most massive change that we've ever seen in our government's history. And I think this is really going to be tough the first year or two, but I think in the long-run, it's going to bring down the costs because the system was on its way to bankruptcy. So this is the first step. If you ask me, would I approve this? No. Is it better than it was? Yes. So it's the first step in getting better.

CAVANAUGH: I have to end it there.


CAVANAUGH: During this hour, we've tried to give an overview of how the Affordable Care Act and more specifically how the new state insurance coverage, covered California, will change health insurance in the state. We know we've left quite a number of questions unanswered. So we're opening up our phones to give your questions and comments about today's rollout of Obamacare. My guests have stayed with us, Gary Rotto, Jennette Shay of the family health centers of San Diego, and David White. Thank you so much for staying. Let's take a call off the bat from Susan in San Diego. Welcome to the program.

NEW SPEAKER: Thank you very much. My question is, I'm self-employed -- I'm starting a new business. I've been self-employed, and now I pay $759 a month in health insurance. And I'm just wondering how can I get it so it's more affordable? Because whatever percentage of my income, that's still a lot to pay per month.

CAVANAUGH: And the second question?

NEW SPEAKER: The second one is that I'm trying to start a new business. And right now, I'm my only employee. So how do I set that up?

CAVANAUGH: Gotcha. Who wants to take that? Gary.

ROTTO: First thing, I have a friend who's in a similar situation. She's the sole employee of a business that she has, and she went onto covered California and started to look there for her and her family. That's the perfect place to begin. And you're probably eligible for coverage.

CAVANAUGH: Is it possible that she can get better than $759 a month on the new exchange?

ROTTO: I think so, and David may have a different opinion.

WHITE: There's no question she is. Unless she's 64 years old, she can get it for less. Even if she is, $750 is high. It might be in the $600s.

CAVANAUGH: Yet there are a lot of people who are paying about that now who are self-employed. And health insurance is very, very expensive.

ROTTO: And there's no cost for going to the website and putting in your information and seeing what comes up as far as what plans would be available.

WHITE: And I would say that she probably is -- unless she makes a fair amount of money, she may be able to get half, maybe 2/3 of it paid for.

CAVANAUGH: Bill, welcome to the program.

NEW SPEAKER: Thank you. I'm a retired senior citizen. I already have Medicare part B. My question is, can I go to the health exchanges and buy a policy in addition to the Medicare so perhaps Medicare would be the primary provider and the new policy would be secondary? Is that allowed?

CAVANAUGH: Okay, thank you. Supplemental for Medicare on the new health exchanges. Does it exist?

WHITE: No, it does not exist.


WHITE: He should phone up a broker and talk with them because he can work through a broker to find out about that. But Medicare is only for -- excuse me, the exchanges are only for the not 65 yet.

ROTTO: And one of the things that I'm finding in some of the forums we go to, they have a question about Medicare and how does the exchange affect Medicare. It doesn't at all. Medicare is a different system. You can't even sign up for Medicare on covered California.

CAVANAUGH: And the same about Social Security. That has not been dealt with in a lot of the coverage of the Affordable Care Act. So it's not for people who are on Medicare now. Supplemental coverage will not be available on the exchanges.


SHAY: Correct. But you also want to remember that some people on Social Security for eligible for Medi-Cal. They would continue to be. So you can be eligible for Medi-Cal and sometimes Medicare when you're on Social Security. So you can talk with your provider, with covered California, or 211 enough questions specific to your individual circumstance.

CAVANAUGH: That's a very good point and I'm glad you made that. I also wanted to ask you about how the Affordable Care Act impacts San Diego County's low-income health program for the uninsured?

SHAY: The low-income health program has been going on for three years. It was the precursor to healthcare reform. If you're eligible for the low-income health program, you want to sign up right now because your benefits will start immediately, and you can have coverage October, November, and December. Come January 1st, everyone on that program will automatically roll into Medi-Cal and become eligible for Medi-Cal. So if you're an adult that's eligible for that program, we want to encourage you to call us now to sign up for that.

CAVANAUGH: Here's a question from someone who couldn't stay on the line. What about veterans who get healthcare through the VA? Do they need to sign up?

ROTTO: I don't know for sure. My understanding is if you receive care through the VA, you will continue to receive care. It's just like if your employer, if you get coverage through your employer, it's not going to change that. So continue to be in touch with the VA.

CAVANAUGH: Okay. Steve is on the line from San Diego. Welcome to the program.

NEW SPEAKER: Thank you. I just looked at covered California. The first thing I saw, I I'm worried that it hasn't been fully tested for human factor testing or usability testing. Big challenge ahead for people to understand certain jargon and stuff. But the main question I had, I'm somebody that has gone on health insurance for about four years, Kaiser kept me off for paying late in one year. I'd like to get health insurance finally. It says I need to pay something like $300 a month, and there's a tax credit that's going to cause that to work out to maybe $100 a month, I'm supposed to come up with $300 extra per month and hope the tax credit is going to quick in 12 months later?

CAVANAUGH: No, let's did to Jennette on that.

SHAY: No, the good news is that when you apply and put in your application, they're going to apply the tax credit to your monthly premium. So you'll pay $100 a month, and you'll report all the back information when you do your taxes.

CAVANAUGH: Okay, Steve?

NEW SPEAKER: And if there's anybody listening from that website, that is totally not clear!

CAVANAUGH: Okay, thank you for that, we'll pass that along. Where should I go to now for a caller? Rebecca is on the line, San Diego. Welcome to the program.

NEW SPEAKER: Hi, thank you so much. My question is about my mother and father-in-law. They are green card holders from China. And they haven't been covered for the past five years under my husband's insurance plan. His plan covers himself and my two daughters. But he totally supports his parents. And they just can't get any coverage from Medi-Cal. Would they qualify for covered California?

CAVANAUGH: Jennette?

SHAY: If they're here legally, they could apply for the covered California. I don't think they would be qualified as dependents under your husband. But that would be something that we'd need to sit down and go over individually. They would be eligible to apply for covered California and then they would have to pay the premium as legal residents.

ROTTO: There will be very specific situations that the website -- it covers 99.9%, and then we're going to still need to talk with people individually. I would urge you to call if you have a particular provider, a clinic. Or call 211 or covered California.

CAVANAUGH: A caller was not able to stay, but he has a really good question. How is this more affordable? Who is paying? Where is the money coming from?

WHITE: Well, I guess you'd say the money is coming from the government. That's a bit of a misnomer. But the concept is that as more people pay into the process, the costs will come down. But where does it come from? It comes from the government. Medi-Cal pays part. And when you apply for this subsidy, that subsidy will come from the government. So it actually is going to come from the government.

ROTTO: And there's actually two parts to it. I'm sure you'd agree as we spread risk should in the insurance industry across more people, you're able to reduce your costs.

WHITE: Right.

ROTTO: And just like volume discounts. If you're a member of Costco, they can create such great buys for its members because it has so many people. So covered California says to the plans we're going to bring this many people together. Give us the best price you can. They're able to do that because of the volume they're able to bring to the plans.

CAVANAUGH: And that's the idea in how this is going to bring down the cost of healthcare; isn't that right?


CAVANAUGH: In other words having more people in the pool, and there are more people covered and being able to negotiate with private insurance companies in order to get the best rates? Isn't that something?

WHITE: Exactly.

CAVANAUGH: Okay, I'm glad I figured that much out!

CAVANAUGH: Let's take another call. Marvin is calling from Temecula. Welcome to the program.

NEW SPEAKER: Hi, thanks for taking my call. I've got a 52-year-old daughter. She has been unemployed, has no dependents, she's been unemployed for a year and a half, prior to that, she just worked a minimum wage job. And I'm wondering what kind of subsidy is available in her situation.

ROTTO: I think your daughter is going to be eligibility for Medi-Cal, if she's unemployed and has no income. If she enrolls, the health insurance and coverage would be provided at no cost.

CAVANAUGH: Once again, that's a big change because a person who didn't have any children before was not eligible for Medi-Cal; is that correct?

ROTTO: That is correct. So she was not eligible yesterday but she'll be eligible to send in an application today, and it would turn on January 1st.

CAVANAUGH: Lisa is calling from San Diego. Good afternoon, welcome to the program.

NEW SPEAKER: Hi, thank you. I had a small business where I have four employees. And currently I have them covered under Kaiser. I'm wondering, can I pay them money instead and have them get their own insurance as an employer? Or am I the one that is obligated to provide them the insurance? David?

WHITE: You're under 50, so you're not obligated to provide them with insurance. So yes, you could do that. What you all the might want to look at is talking with a broker to do a defined benefit plan where you pay each employee X amount of dollars. And basically that's basically a contribution toward whatever their premium might be. Let's say the premium is $300 a month. You say I'll pay each employee $100 a month, then they get it for $200 a month.

CAVANAUGH: Someone on the line also wants to know, they're part of the UCSD system that has Healthnet, but it's no longer available. Is there a similar system on the exchange? How will people compare the coverage they have now with the coverage on the exchange?

ROTTO: When you put in the information, you're able to click on the plan, and it's going to have your list. First of all, of the ten essential benefits, then what the cost would be for a co-pay for your standard office visit, a hospitalization, other things like that. So you'll be able to take that, print it off and compare it with what you currently have and be able to put it side by side.

CAVANAUGH: Bill is calling from Bonita. Welcome to the program.

NEW SPEAKER: Thank you. I had a general question about children with special needs. My little daughter is six, she's got autism. And we were using blue cross before. They won't pay for any of her therapies. Medi-Cal covered some of it. But where do you go to get speech therapy or medical therapy? Is this going to be different?

SHAY: I want to encourage you to call family health centers of San Diego. We have an entire department dedicated to children with developmental delays. 515-2363. The Medi-Cal program isn't exchanging its benefits. But there are other resources we can work with you on. The regional center and a CCS program that might be able to help.

CAVANAUGH: And we will have that number on our website as well, Bill. Thank you so much for the call.