Category Archives: California Health Insurance

Ending Health Subsidies: ‘People Will Die’

Six Embarrassing Headlines on Subsidies from October

By Marc Derendinger, Sr.

  • President Trump Ends Healthcare Insurance Subsidy Program – Fortune [October 12, 2017]
  • Ending Health Subsidies: ‘People Will Die’ New York Times-Oct 13, 2017
  • Trump to halt subsidies to health insurers – ABC News [October 13, 2017]
  • Trump’s strike on health insurance subsidies jolts markets, Washington [October 14, 2017] 
  • Trump will end ObamaCare subsidy payments | New York Post [October 12, 2017] 
  • White House to halt health insurance subsidies The Boston Globe-Oct 12, 2017 

This small sample of headlines from October 12th to 14th emblematize a disappointing age in the history of American Journalism, where indifferent editors compete for reader “clicks,” for the purpose of increasing advertising revenue.

“Yellow Journalism” is based upon sensationalism and crude exaggeration (

After answering several individual inquiries to explain Trump’s decision on subsidies, I feel compelled to put this explanation in public view (if for no other reason, than to catch my breath). The following paragraphs attempt to more accurately explain what Trump did to Subsidies, as it concerns Californians.

Background: The California individual health insurance market is segmented into two halves:

  1. Covered California plans e.g. Kaiser, Blue Shield, HealthNet, Anthem etc., which are potentially eligible for Subsidies
  2. Off-exchange (same plans as above, but purchased directly from the insurers)- Not Eligible for Subsidies

Further, there are two types of subsidies addressed in this article:

  1. The APTC (advance premium tax credit)- Most Covered CA policies enjoy this subsidy (about 5 billion dollars worth*), whether Minimum Coverage, Bronze, Silver, Gold or Platinum (*Source: Covered California Active Member Profile of March 2017, reported June 1, 2017:  estimated using 828,973 policies, $499 average APTC)
  2. Cost-sharing Reductions (CSR)- only Silver Plan policies receive this subsidy

In contrast to recent headlines, Trump’s orders do not impact the APTC subsidy, which are funded specifically from a California health and dental insurance premium tax (of approx. 3.8%) on California insurance companies. (Truly, one could argue greater damage to the market place was done by Anthem, with its plans to pull out of all California counties except three).

“Trump’s recent order does not impact the APTC subsidy”

The APTC funding mechanism was enabled by the original PPACA legislation. However, Congress blew it when they neglected to include funding for the second subsidy, “CSRs,” leading to the current situation.

What are the CSRs? This misnomer is a buzzword for “coverage enhancements” made to a Silver Plan for applicants with household income from 133% to 250% of the Federal Poverty Level. It lowers copayments and deductibles (essentially making a Silver Plan into a Gold or Platinum+ Plan, at no additional premium). The cost for the coverage upgrade has been coming from the feds (until Trump’s orders).

“Enhanced Silver plans include more robust coverage for the price of the same Silver premium. These plans include lower copays, coinsurance and deductibles compared to normal Silver plans.” [Covered California, July 21, 2017]

Of the Silver plan policies issued in Covered California, about three-quarters qualify for CSRs.  It is noteworthy that whether your Silver plan enjoys CSR status or not, the monthly insurance


premium and the APTC subsidy remain the same.

Interestingly, Trump’s order only impacts adults, because children of these households are taken out of Covered California automatically, and sent to a Medi-Cal case worker for possible coverage (all children in households with less than 250% FPL). So what happens to the remaining adults? Assuming Congress does not provide funding, they would likely receive a supplemental premium notice for the extra coverage, with the option to downgrade to the regular Silver 70 plan for no difference in premium. Yet this may be a worst-case scenario, and here the story gets interesting.

A Small Subsidies Surprise

The deeper we dig, the greater the surprise.  The grand surprise follows this paragraph, but first, in a paper commissioned by the public healthcare exchange, Covered California** and published January 26, 2017, researchers estimated if CSR funding were cut-off (presumably by President Trump), overall Silver policy premiums would increase 16.6% for 2018, AND, rather than causing a multitude to lose insurance coverage, this Covered California-sponsored paper estimates Covered California would actually gain a net 20,000 new members!  (**source:  Evaluating the Potential Consequences of Terminating Direct Federal Cost-Sharing Reduction (CSR) Funding, By Wesley Yin, Ph.D., and Richard Domurat, Ph.D. candidate).

A Big Subsidies Surprise

Closer inspection of a Covered California report issued July 21, 2017 suggests a contingency plan was conceived last June, in the event CSR funding was ceased.  Taken verbatim from this report:

What happens if the cost-sharing reduction payments are stopped?

“In June, Covered California’s board took steps to protect most consumers from any rate increases caused by the uncertainty surrounding cost-sharing reduction payments. The board acted to place any rate increases caused by the uncertainty only into Silver plans. If the federal government does not act to provide certainty that CSRs will be funded, Silver-level consumers would see an increase in the gross cost of their premiums, they will also see an increase in the amount of  financial assistance they receive, leaving their net payment virtually the same.” [Source: “How Cost Sharing Reductions Work:” Covered California, July 21, 2017]

Recent Headlines

Reflecting on recent headlines, readers beware:  Yellow Journalism is prejudiced, jaundiced, and lurks everywhere…even from the world’s most respected news organizations:

Ending Health Subsidies: ‘People Will Die’  New York Times-Oct 13, 2017


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Zenefits Transfers 7000 Insurance Accounts

What will happen to Zenefits’ 7000 employers now that the San Francisco firm has announced it will exit the insurance “broker of record” business?

“By partnering with OneDigital, Zenefits is essentially getting out of the broker business, a move that will allow the company to focus solely on making software.” [San Francisco Chronicle, September 21, 2017]

Zenefits: From San Francisco to Atlanta, Georgia

As reported in this recent San Francisco Chronicle story, Zenefits has arranged with Atlanta-based firm, One Digital, to take-over servicing the 7000 insurance accounts.  Atlanta, Georgia? This may be the perfect time to say “no” to Atlanta and transfer your account to a Local Broker.

“With less than two months from open enrollment season, the Zenefits decision provides California Employers a timely opportunity to transfer to a local, California Broker: We are already receiving phone calls.”  [Marc Derendinger, Insurance Broker #0644617]

How To Keep Your Insurance In California

If you have Kaiser Permanente, check with for a Local Broker.  For employers who offer dual choice benefits or plans from Anthem, United HealthCare or Blue Shield, contact this 50-year California-based benefits brokerage, the San Francisco bay area.

Zenefits exits Broker Business

 Telephone (408) 252-7300 to discuss your options with a local broker, license 0644617

Blue Shield PPO replaces Anthem Blue Cross

Blue Shield PPO replaces Anthem Blue Cross on January 1, 2018, as the only major medical PPO plan in Santa Cruz, San Benito and Monterey counties, according to statements released by Anthem and Covered California.

Which Counties will Anthem keep?

(Anthem will not offer individual policies in Santa Cruz County. Refer to related story…)

Even Kaiser Permanente is jumping on the chance to add new subscribers in selected zip codes of Santa Cruz county [see related Kaiser Story].

Blue Shield replaces Anthem Blue Cross- Kaiser is an option

Blue Shield PPO replaces Anthem Blue Cross?

“Our readers would ask why is the Blue Shield PPO the best option to replace Anthem?”

According to Covered California’s August 2017 published report, “Covered California’s Health Insurance Companies and Plan Rates for 2018,” Anthem held 39% of its 29,050 individual health policies in Region 9 (Santa Cruz, San Benito and Monterey counties):

Blue Shield PPO replaces Anthem Blue Cross

  • 39% Anthem
  • 34% Blue Shield PPO
  • 8% Blue Shield HMO
  • 2% HealthNet EPO
  • 17% Kaiser Permanente HMO

Effective January 1, 2018, Blue Shield appears to be the only individual PPO plan available through Covered California.  In fairness to HealthNet, they offer an EPO plan.  Request a FREE Free Rate quote between Blue Shield and HealthNet.


Is Blue Shield PPO Really Your Best Option

The 2018 rates are not released yet, but Blue Shield has filed two sets of rates for the upcoming open enrollment, depending on whether or not CSR funding is approved in Washington.

Sample 30 year-old 2018 Premium for Blue Shield’s Silver 70 PPO:
Without CSR Subsidy Funding                    Including CSR Subsidy Funding

$609.49 monthly (2018)                            $562.63 monthly (2018)

To compare the current (2017) year premiums in your county, use this free quote engine.




Anthem Individual Health Insurance Changes Again

More Disruption Ahead For Anthem Individual Health Insurance Policyholders, As Anthem drops Covered California In Most Counties

Why is Anthem withdrawing from the exchanges in California?

Which Counties will Anthem keep?

(In Anthem’s own words…)

“While Anthem is reducing its 2018 Individual plan offerings in California, it is not withdrawing from the exchanges. We are pleased to be participating in three key areas”

“On-exchange and off-exchange EPO plans at all metal levels will be offered in three regions of Northern California…”

We give credit to for covering this story:  Read the full article

Mandatory Doctor Assignment Has Arrived In California

Obamacare’s Covered California says they know what’s best for you, and mandatory doctor assignment is the best medicine, according to the experts in Sacramento. How did a quasi-government agency get the authority to practice paternalism in the golden state?  Using their authority to negotiate insurance carrier contracts, Covered California modified the contracts with Mandatory Doctor Assignmentparticipating insurance companies, such as Anthem Blue Cross, requiring participating insurance companies to begin mandatory doctor assignment on individual plans in 2017. While really not applicable to HMO plans, the mandate targets PPO and EPO plans, in particular.

Frequently Asked Questions

Yet, Anthem Blue Cross made a recent decision to go beyond the Covered California mandate, and apply Mandatory Doctor Assignment to off-exchange (all California individual and family plans), as well.

The Impact of Mandatory Doctor Assignment

We expect the impact on Anthem policyholders to be minimal, of course, because aside from a few grandfathered policies, Anthem Blue Cross does not have many PPO plans left in California, as reported in a recent article, Anthem PPO Plans Discontinued.

Looking to leave Anthem and find good PPO insurance in California?  Whether it’s medical, Guardian dental or vision from VSP, get 24/7 online insurance quotations from this Northern California independent agent.  Hurry! Except for dental and vision, open enrollment closes January 31st.

Patient Protection Affordable Health Care

The Patient Protection & Affordable Care Act

UnitedHealthcare To Quit Covered California

Another health plan joins the California wall-of-shame, as Covered California announces the departure of UnitedHealthcare. Existing members can continue on through December 31, 2016, allowing them time to find a new plan during the Fall 2016 Open Enrollment.

UnitedHealthCare quits Covered California

UnitedHealthcare Quits Covered California

According to Covered California, UnitedHealthcare’s presence in the Covered California individual marketplace is small, at one tenth of one percent. Yet the impact will be greatly felt in some Northern California regions, where only three plans are available to consumers.

Health plan consolidation is already contributing to the lack of viable options in California. For example, in 2005 United Health Group purchased PacifiCare, which had previously acquired FHP, who had acquired TakeCare in 1994.

Some long-time market stakeholders fear “consolidation” plays into the hands of California legislators who are pushing for a single, government-run plan. They wonder if some legislators go beyond “cheering” for the Affordable Act’s demise, and would stoop so low as to sabotage its successful implementation?  Are there more democrats than republicans, hoping for Obamacare’s demise? Really?

UnitedHealthcare Regions in California

Region 1Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne, Yuba
Region 9Monterey, San Benito, Santa Cruz
Region 11Fresno, Kings, Madera
Region 12 San Luis Obispo, Santa Barbara, Ventura
Region 13Mono, Inyo, Imperial

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local assistance in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

or view online pricing, free of charge

Shopping California Health Insurance

Shopping California Health Insurance? Smart consumers with existing insurance policies are returning to the California group insurance market.  Don’t be stuck with your plan for another year.

Shopping California Health Insurance Locally

View online pricing, free of charge.

9 Risk Factors Applying To Covered California

In addition to the advantages, we have documented at least 9 disadvantages i.e. 9 risk factors applying to Covered California.  Despite limited media attention, these factors require caution and understanding, because of the potential for problems after you apply to Obamacare.

9 Risk Factors Applying To Covered California

9 Risk Factors Applying To Covered California

We encourage California residents to study the balance of this report carefully, in order to make the best decision for your family.

9 Risk Factors Applying To Covered California

9 Risk Factors Applying To Covered CaliforniaDescription of RiskPossible Solution
Risk Factor 1The State of California (via county social services agency) verifies the financial information on your CoveredCA application and has the power to make you “ineligible” for CovCA insurance if there are discrepancies between the application, filed income tax returns, immigration documents etc.Understand that CovCA uses last year’s tax return information to estimate your APTC subsidy, however the true amount will not be known until you file this year’s tax return. Work with a Certified Agent who can discuss these issues with you.
Risk Factor 2The verification of your application occurs during an indeterminate period of time, usually between January and August, but usually after you have cancelled your former insurance.
Risk Factor 3A frequent and undesirable outcome of the agency’s application verification process is that your insurance is revoked and you are temporarily placed in Medi-Cal, pending approval by a Medi-Cal eligibility case worker. Medi-Cal representatives will use the authority of the State of California to issue a system-generated freeze, named “soft-pause” on your file at CovCA. It effectively prevents Covered California IT engineers from “fixing” or undoing this Medi-Cal action. Your only recourse is to personally visit the county social services agency and attempt to determine the identity of your case worker, and then to arrange a meeting in the hope of opting out of Medi-Cal.
Risk Factor 4Placement into Medi-Cal, outside of “open enrollment” season is not a qualifying “special event.” This prevents you from re-applying elsewhere, since no health plan will accept your application until the next open or special enrollment.If this occurs during an open enrollment period, you can re-apply directly to Kaiser or another health plan. Otherwise, you will have to stay on Medi-Cal until the next Open or Special enrollment period.
Risk Factor 5Involuntary loss of health insurance could result in losing access to your personal physician(s).There is really no remedy, except to find a Medi-Cal doctor or specialist and transfer your chart.
Risk Factor 6Involuntary placement into Medi-Cal mid-year could occur during a course of treatment, surgery etc.We have observed cases where this has happened, and it is unfortunate.
Risk Factor 7Split Family Coverage: Since Medi-Cal eligibility for children is at 250% of FPL, compared to 138% for Adults (in most cases), a common outcome of a family application is that the adults are processed for CovCA insurance with a subsidy, but the children are declared ineligible and are pended for Medi-Cal.Work with a Certified Agent who can estimate the probability of this occurrence and will be prepared to submit child-only applications directly with the insurance carrier (off-exchange) to avoid Medi-Cal. It may be necessary to submit dual applications (on and off exchange) if the open enrollment deadline is near.
Risk Factor 8f your income increases during the year, your APTC subsidy could be less, resulting in you having to repay the IRS for part or your entire APTC subsidy.Ask your Certified Agent to lower the monthly APTC subsidy to give a safety margin. When you file your tax return, you will get the difference paid to you, assuming you are eligible for it.
Risk Factor 9If the IRS determines you were eligible for qualified, affordable employer-sponsored health coverage, your APTC subsidy will be reversed, subjecting you to penalties and interest.When an employer offers an employee health insurance, a report is sent to the IRS, identifying the employee by name and social security number, even when you decline the coverage. This is how the IRS cross-checks this information. If you declined coverage, you may still qualify for the subsidy via an exception. Work with a Certified Agent or your tax preparer to see if you qualify for the exception.

Caution is advised when you buy Obamacare through CoveredCA. To read more about the pros and cons of Covered California in general, and whether you should buy the Obamacare Kaiser plan, read this story at

View online pricing, free of charge

Re-Shopping Obamacare For Better Covered CA Insurance

New York Times writer, Margot Sanger-Katz is suggesting consumers should be re-shopping Obamacare coverage. The article argues the savings could be substantial. Even the Health and Human Services agency discovered last year that “Returning Consumers Who Shop Save Money.”

Re-Shopping Obamacare

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?

View online pricing, free of charge

“Returning Consumers Who Shop Save Money.”

Re-Shopping Obamacare

Re-Shopping Obamacare

Change Kaiser Group Health Insurance To Covered California?

FAQ Kaiser Group Health Insurance and Covered California

Question: We are a non-profit organization located in California: Is there any advantage if we change our Kaiser group health insurance plan to Covered California?

Answer: Yes, there are advantages of buying Kaiser group health insurance through Covered California. For example, many non-profits can take advantage of a special tax credit under the Patient Protection And Affordable Care Act, if eligible (read the rest of this article at

Finding Help Locally

or view online pricing, free of charge

Compare off-exchange and Covered California Kaiser Small Business Plans using our free online rate calculator.