California health exchanges – ‘Mo Money’

Dec. 28, 2012

By Katy Grimes


The Obama administration has a lot riding on California’s implementation of Obamacare, also known as the Patient Protection and Affordable Care Act. How the state implements the new insurance exchanges, and whether or not it is done successfully, will be an important test of nationalized health care.

But a state-run health exchange puts the burden onto the state and the expense ultimately on the taxpayers. The state loses the authority and flexibility needed to best meet the needs of its people… Which is why more than 30 states have told the Obama government that they will not create state-run health exchanges, leaving the Obama administration to build and operate online health insurance markets for more than 30 states. This is an unexpected problem, unanticipated by the federal government when Obamacare was passed in 2010.

But this isn’t a problem for Democratically controlled California government, which will do just about anything for a federal grant.

Politics and health care

Don’t discount the politics involved. The California Democratic Party is clearly hoping that this latest government expansion works. Then again, Democrats think the DMV works.

However, if people don’t enroll, the state stands to lose billions in federal dollars.  Many warn that if this happens, all insurance premiums will rise in California.

The state expects to enroll more than 2 million additional residents in Medi-Cal, the state’s version of Medicaid, and sign up another 2.5 million for subsidized private insurance.

Medi-Cal pays for health care services for individuals receiving welfare.

Marketing and PR on the backs of taxpayers

And California, on the brink of insolvency, plans to spend nearly $90 million in 2013 on marketing and “raising public awareness” about the exchange. The state hired eight public relations firms to come up with the marketing plan using traditional advertising, grass-roots efforts at churches, schools and cultural events, and will even enlist the help of Hollywood in movie theaters and popular television shows.

Implementing this extensive, expensive marketing plan will take a great deal of coordination. But never fear, the state is here, and the state knows how to market to itself.

“In addition, as required, the plan’s elements for outreach include consideration of core principles and opportunities for seamless coordination with public coverage programs and the Project Sponsors: The California Health Benefit Exchange, the California Department of Health Care Services (DHCS) and the Managed Risk Medical Insurance Board (MRMIB) as well as the programs they administer: Medi-Cal, Healthy Families, Access for Infants and Mothers program, Pre-Existing Condition Insurance Plan, Major Risk Medical Insurance Program and other state health insurance programs. The California Office of Patient Advocate will also be providing outreach, education and consumer assistance,” the marketing team plan says.

Expanding subsidized health care – who pays?

The overall goal is to provide health insurance to a “projected” 5 million “uninsured residents” – half of which will qualify for low-income subsidies.

Who is uninsured in California? According to the California Healthcare Exchange, 47 percent are Latinos, 33 percent are whites, 21 percent are African Americans, 12 percent are Asian, and 3 percent are “other.”  And of these uninsured or “eligible,” 2.6 million qualify for subsidies, and 2.7 million don’t qualify for subsidies but will now have “guaranteed coverage.”

If this still doesn’t look like a giant government expansion, I have some lovely swamp land to sell you. It is clearly not based on need. If the government really cared about insuring uninsured Americans, a gap insurance policy would have been created to insure the legitimate 10 million estimated uninsured Americans.

Instead, the Obama administration saw an opportunity to grossly expand government, and jumped on it. While other states ran from creating the exchanges, California’s liberal politicians jumped in as well.

We are already falling off the fiscal cliff, while the state’s Democrats are forming committees to decide how to spend the new tax revenue. California’s real debt is $617 billion – the highest in the entire country.

The real national unemployment rate would be closer to 11 percent if it weren’t for all of the people who have stopped looking for work and completely dropped out of the labor force. And the really real unemployment rate is a separate government number called the “U-6,” rarely reported by the media, which provides an accurate look at how many people are really unemployed.

According to the U-6, California has a 20.3 percent real unemployment rate.

Twenty-three million Americans are struggling to look for any work, nearly one in six are living in poverty, and 47 million people are dependent on food stamps to feed themselves and their families.

California’s real debt is 10 times what Brown and the state Democrats report. Facing insolvency and continually expanding state government, Californians are probably facing a more than just downgrade of medical benefits.

While other states are refusing to expand Medicare or implement the Obamacare health exchanges, California has sold out to the federal government program, and more importantly, the money.  It’s just about the money.


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  1. Left of Rio Linda
    Left of Rio Linda 28 December, 2012, 20:41

    We be hosed.

    Reply this comment
  2. We dont need Facts
    We dont need Facts 29 December, 2012, 08:33

    Your article attempts to draw a correlation between the federal Exchange grant dollars for outreach and the state budget deficit. The outreach program is paid for wholly by federal dollars, not state dollars. In fact, the state law that created the Exchange made explicit several times that the if any state General Fund was necessary for the Exchange, it would discontinue operations. And states are refusing to expand Medicaid, not Medicare as you state (they are very different populations). Finally, the majority of folks on Medi-Cal are working Californians, not those on CalWorks (welfare as you call it). Just a few real facts for your readers.

    Reply this comment
    • Relevant facts would help
      Relevant facts would help 3 October, 2013, 11:19

      Paid for by what federal dollars? The Federal govt. is broke and even our president has said so. The federal government is bailing out California currently while borrowing 41 cents out of every dollar they spend and will have to continue to do so unless serious changes occur (both bail out California and borrow money). Making a point about “different populations” doesn’t change the overall fact that someone is going to have to foot the bill for this thing and it will be taxpayers.

      Reply this comment
  3. Hondo
    Hondo 29 December, 2012, 08:52

    The dems will rue the day that passed this mess. This is probably the worst piece of legislation the congress has ever passed.
    I rivals the Dred Scott supreme court decision.
    I hope this doesn’t lead to a civil war.

    Reply this comment
  4. shsp
    shsp 29 December, 2012, 09:03

    Furthermore the bill for the computer system is about $300k. I am sure the Ogilvey PR contract is 7 figures. I am on the mailing list for HBEX where I have asked questions. The PR firm contacted me wanting to “write my story” for the exchange. I told her that I couldn’t see a need for an exchange. Let people shop for insurance like they buy cars. The HBEX is now “selecting” firms to be in the exchange. What about those not selected? Will they still sell insurance? I am sure that such incertaincies were the impetus for a strange letter I received from my health insurance (which I have had since 1980) saying that there were renewing my policy for 2013 but ‘could not guarantee ‘ anything in 2014. No reason given.

    Reply this comment
  5. SeeSaw
    SeeSaw 29 December, 2012, 12:23

    I will have to be able to completely understand what is going on before I will have an opinion. I don’t know how anything could get worse than the cost of my existing medical insurance premiums.

    Reply this comment
  6. Donkey
    Donkey 29 December, 2012, 14:06

    It is all available to read SeeSaw. I will tell you that we all will be paying for a brand new RAGWUS bureacracy similar to the DMV, and it will not so one thing to improve anyones medical care. In short , the Obamacare scam is just another government jobs program to steal from private citizens!! 🙂

    Reply this comment
  7. dltravers
    dltravers 29 December, 2012, 14:20

    You would think that if more people were involved rates would go down. Insurance is supposed to work that way. With the heavy hand of government involved one can only wonder what will really happen.

    Most people cannot cope with managing a 401K let alone wading thru what will turn out to be a minefield of government health insurance regulations. Mind you I am sure those lovely bureaucrats will be there to help.

    While complicated we can expect some results. Chaos in the markets, market manipulation by powerful companies, crooks gaming the system, less care for those that had insurance prior, untimely care, and the possibility of refusal of care for elderly patients not deemed important.

    If people cannot afford it before goverment became involved, how will they afford it after? Its going to cost an ocean full of money

    Reply this comment
  8. SeeSaw
    SeeSaw 29 December, 2012, 16:01

    I will reserve judgment until I understand it. I can read, Donkey, thank you.

    Reply this comment
  9. SeeSaw
    SeeSaw 29 December, 2012, 16:03

    I think any scam involved is due to the insurance companies’ involvement. We are all their victims, including Obama.

    Reply this comment
  10. SeeSaw
    SeeSaw 29 December, 2012, 16:09

    With millions of cars in CA, we have the DMV. Of course its a bureauocracy, Donkey! What do you think CA is! If you don’t want bureauocracies to regulate CA, move to a state with only 300,000 population.

    Reply this comment
  11. Donkey
    Donkey 29 December, 2012, 21:30

    SeeSaw, the DMV doesn’t regulate a thing! It is a two-bit jobs program for people that either never sought productive work, have friends in the RAGWUS, or simply are unquilified for any private sector work, just like most government positions.

    If you believe adding another bureaucracy of governemnt to pass out health insurance is going to lower the costs of medical care then I would have to believe you would drink anything the Obama put in front of you. As a nation, we will pay more for less, and in the end, pay more for very little, because it will all be going the the bloted state medical bureaucracy workers pay, benefits, perks, and pensions. Greed has to be eliminated, and soon. 🙂

    Reply this comment

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