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'Big Risk' Dropping Health Coverage After Obamacare Penalty Removal, Official Warns

An ambulance is parked outside of the emergency room at UC San Diego's Medical Center in Hillcrest, June 5, 2018.
Susan Murphy
An ambulance is parked outside of the emergency room at UC San Diego's Medical Center in Hillcrest, June 5, 2018.
'Big Risk' Dropping Health Coverage After Obamacare Penalty Removal, Official Warns
'Big Risk' Dropping Health Coverage After Obamacare Penalty Removal, Official Warns GUEST: Peter Lee, executive director, Covered California

The deadline to sign up for Covered California is fast approaching but the state health exchange is not expecting a banner year for sign ups. Since the Trump administration has removed monetary penalties for not having health insurance far fewer people are expected to get health coverage this year. But covered California is trying to make the case that having health insurance is essential. Whether there's a penalty or not. Joining me is covered California Executive Director Peter Lee. And Peter welcome to the program. Great to be with you. Tell us about this penalty that's been removed. It means that people will no longer have to show proof of insurance on their tax returns well they actually still need to show it on their tax returns because it's still part of the law. But if they don't have insurance there's no penalty. And we're out there reminding people that the real penalty is a Senate a couple hundred dollars to the IRS. The real penalty is showing up at the hospital and walking out with a hundred thousand dollar debt. And because of that the vast majority of Californians are signing up for coverage are recognizing that it's about affordability. But on the margins if people don't sign up they're healthier people it's going to raise costs for everybody. How many people do you estimate will choose not to enroll because the penalty has been removed. Know we estimate that as many as 250 or 300000 Californians in the individual market will go without coverage and Rembert you go without insurance. You're not only you know rolling the dice for yourself but in the end everyone pays the price because some of the people that go without insurance will go into hospital and will end up not paying their bills which we all pay. So it's really a virtuous cycle getting coverage then if it's the person who gets it and benefits the entire community. Peter I'd like you to go into that a little bit because I've read that you cite two major reasons that having health insurance is essential one is for individuals who may unexpectedly get sick. And the other is for the whole covered California system. Can you explain that to us. Why have insurance. Well first last year we had over 50000 people in Covered California that had a cancer diagnosis. None of them plan to have cancer. You don't plan for things you know you don't know are going to happen. So and so getting insurance is for the plan. But it's also for getting preventive services to stay healthy. That's a direct immediate benefit to have insurance to you. But the other part it's sort of like wearing seatbelts wearing seatbelts is not only a good thing for you because it keeps you safe if you get in a crash. We all benefit because there's people that have less injuries that we're not picking up the tab for some of the people that go without insurance are going to get sick. They're going to show up at an E.R. they're going to go into the hospital of a hundred thousand dollar bill they'll pay part of it. They may be in debt for years to come but they won't pay a big chunk. Hospitals have had billions of dollars of uncompensated care historically that is now at the lowest level ever because people have insurance in California. We all pay for people that go to the hospital don't get covered and end up having bills that we all pick up. Now what percentage of Californians are signed up for health insurance now. And how do you expect that to drop well a couple of things first. You know California's made truly historic gains in covering people. We've now got instead of 17 percent of Californians uninsured which it was five years ago. It's about 7 percent. We've dropped the rate of uninsured by 10 percent that's the biggest drop in the entire nation. But that still means we've got about two and a half million people without insurance. The vast majority of the vast majority of them are undocumented people that are not eligible for state or federal programs. But there's another about a million people that are eligible for either medical or Covered California. Today over 100000 living in San Diego eligible today to get financial help to get a private health plan through Covered California or potentially sign up for medical. They're the people who are trying to get the word out to with this open enrollment period that wrapping up for January effective date on December 15th. Though I do want to remind you that we're going to be open all the way into January our open enrollment period closes in January but if you don't sign up now you won't have coverage starting on the beginning of the year. How do people go about signing up and why are you out there marketing their so heavily. Number one we've got marketing because it's new people every year that have become uninsured and we know that even though like in the San Diego area there's 100000 people eligible for financial help. They don't know what. Three out of four of them don't realize how much financial help they can get. And by going to coverage seeI dot com they can find out in two minutes that their premium might only be 50 dollars a month 100 dollars a month. And the reason we need to do the marketing is it's easy to get information it's easy to go to Covered CA dot com and find an insurance agent in your community. But people need to be reminded that health insurance matters. Everyone thinks they're not going to get sick without being nudged reminded cajoled people don't take that step of getting online and finding out how much they can save and how easy it is to get coverage. What other changes are happening with Covered California next year won't premiums be going up. Well premiums are going up a bit. On average if you don't get a subsidy which is in the individual market about half of the people who get financial help to lower their premiums for them premiums hardly went up at all. They're pain on average 100 dollars a month for coverage because the subsidy might cover 400 dollars for people that get no subsidy. Premiums went up a little over 8 percent. Now every dollar premiums go up means it's a struggle for some Californians. The main thing that we're looking at for us is how to work with the legislature the incoming governor to bring costs down for everybody. And we're actually going to be preparing a report for the legislature on what can be done to make health care more affordable as much as we've done in California to use all the tools of the Affordable Care Act. We know health care is still expensive and what ever we can do we want to be part of the solution to make it affordable for everybody. Tell us again when the deadline for new romantics. There's two really important deadlines. The number one coming up on December 15th is to get coverage that can start on January 1. That deadline is really important because every day you go without insurance you're rolling the dice. Open enrollment though for Covered California in the individual market goes until January 15th. But if you don't sign up before January 15th you're going to run the risk of going a year without insurance coverage. That's a bad risk that we don't want anyone to take. I've been speaking with Covered California Executive Director Peter Lee and Peter thank you. Thank you so much.

As the deadline looms for Covered California, the state health insurance exchange, nearly 90,000 new consumers have purchased a health plan since open enrollment began in October, and more than 1 million people have renewed their coverage. But tens of thousands of people are expected to forgo health insurance in 2019.

“We’ve projected that about 12 percent fewer people will enroll because of the penalty going away,” said Peter Lee, executive director for Covered California.

For the last eight years, a federal tax penalty for not having health coverage charged the greater of $695, or 2.5 percent, of household income. The mandate was eliminated this year by the Trump Administration.

Lee said people who choose not to have health insurance are taking a big risk.

“They’re doing two things: they’re gambling with their own health because some of them are going to end up in the hospital with big bills,” Lee said. “But also they’re raising health care costs for everybody else because when you have healthy people choose not to enroll, that raises the cost for everybody else.”

Lee said nearly 50,000 people with Covered California plans last year had a cancer diagnosis and more than 20,000 had a broken arm or dislocated shoulder.

VIDEO: 'Big Risk' Dropping Health Coverage After Obamacare Penalty Removal, Official Warns

“Not one of those people went into last year thinking, ‘Hey this is the year I could have cancer. This is the year I could break an arm,’” he said. “That’s why we’re out there beating the bushes, reminding people that life can change in an instant.”

Nearly 100,000 people in San Diego are eligible for financial help with premiums, Lee said.

"If you get a subsidy, most people are paying between $50 and $100 a month for their entire share of the premium," Lee said. "Because the subsidy, the tax credit, picks up about 80 or 90 percent of their bill."

“Health insurance can be confusing and that’s one of the reasons we’re so happy to have literally hundreds and hundreds of licensed insurance agents, enrollees, throughout San Diego, throughout California,” Lee said.

For coverage beginning Jan. 1, the deadline to sign up is Dec. 15. The last opportunity to sign up is Jan. 15. For help with enrollment visit

'Big Risk' Dropping Health Coverage After Obamacare Penalty Removal, Official Warns
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