CA says ‘no’ to Obamacare freebies, makes own law

CA says ‘no’ to Obamacare freebies, makes own law


Shelton, Obamacare, Nov. 22, 2013One of the most liberal states in the nation has said no thanks to a key Obamacare provision and instead is enacting its own version of the law.

California has decided to skirt the “Buy 1, Get 3 Free!” loophole in the Affordable Care Act, a modest piece of the sprawling health care regulation with huge implications. The provision holds the insured blameless for failing to make monthly premium payments, while requiring doctors and insurers to continue to offer health care. During a three-month grace period before cancellation, subsidized policy holders can see doctors, have operations and rack up medical bills without paying for anything.

Doctors and insurers will be left holding the bag.

“California is usually leaning to the left, but Obamacare has gone so far that even the left coast is coming back a little to the center,” said Rep. Louie Gohmert, R-Texas, who is among a core group of congressional members who have tried to unwind Obamacare.

He has a counterpart in California: state Sen. Ted Gaines, R-Rocklin, who is vice chairman of the state’s insurance committee.

“When even California has stricter rules (than Obamacare) for a giveaway, that should tell you something,” Gaines said. “This three-for-one freebie is so bad that even the No. 1 Obama cheerleader state had to break ranks. I’m not shocked anymore by any ridiculous Obamacare example. I’m surprised it’s not four-for-one or six-for-one.”

CA version

To that end, the California Department of Managed Health Care is drafting its own version of section 156.270 of the Affordable Care Act that says policy holders will be suspended and unable to use their Obamacare plan after one month of non-payment, which is consistent with California law for all other plans purchased outside of the state’s exchange.

“From our perspective this makes it much clearer to the enrollee who ultimately is responsible to pay these bills,” said Marta Green, spokesperson for DMHC. “If I walk into an insurance provider in month two or three and if I get $10,000 worth of services, at the end of the month I am responsible for $10,000 worth of bills. We are not going to have people caught unaware.”

California is drafting language to the law and then it must go through a 45-day public comment period before it can be enacted.

“We have to analyze those comments and if everyone is on board we will finalize the regulation,” Green said. “It is our priority to get this resolved.”

March is the first month that doctors could conceivably be stuck with fronting free health care.

Freebie loophole

The freebie loophole first caught the attention of the vocal California Medical Association several years ago. CMA officials immediately began peppering the U.S. Department of Health and Human Services with notices of concern seeking clarification. Initial drafts of Obamacare left insurance companies on the hook for all three months of the grace period.

“Nobody really had any idea that the feds were going to go in this direction — that doctors are left holding the bag for months two and three,” said CMA Association Director C. Brett Johnson. “They came out of nowhere with this and didn’t give us a public comment period.”

When the federal government’s final ruling came down on March 27, 2012, the CMA found that it violated several California laws. But it was also missing something that would give the CMA some leverage: language stating that the Affordable Care Act was preemptive, meaning that the federal version would prevail over conflicting state laws.

So, armed with this bit of ammunition, the CMA set its sights on state health regulators and found a willing ally.

Besides the three-month grace period, Obamacare also violates these California laws:

  • “Prompt pay,” which states that health plans must promptly reimburse health care providers; and
  • “Recision,” which means California has a host of conditions that must be in place before retroactively terminating a policy. None of these is addressed in Obamacare.

In addition, Obamacare creates a federal dichotomy because the law states that insurance companies cannot charge different rates inside the exchange. In reality, rates would have to be higher inside the exchanges to compensate for the grace-period freebies.

So the DMHC contacted the Center for Medicare and Medicaid Services and told them what they intended to do.

“We got approval,” Green said. “What California is proposing is that, if you (the insured) get in the black and pay your premium retroactively, you are all good. If you had services, you will be reimbursed.”

On Tuesday, the American Medical Association passed a resolution stopping short of backing California’s version of Obamacare. It asked for doctors to be notified if patients were in the grace period and stated an opposition to any federal law that would preempt state law.

“States have been floating around saying, ‘This really sucks but it’s out there and we don’t know what we can do,’” Johnson said. “We have a solution.”

Editor’s note: This is cross-posted from

Contact Tori Richards at [email protected] or on twitter @newswriter2.


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  1. LetitCollapse
    LetitCollapse 22 November, 2013, 14:20

    Do any of you remember when Congressman Joe Wilson yelled out “You lie” when Obama fraudulently sold his ObamaCare plan during a congressional speech before the American people just prior to ObamaCare being passed into law?

    Joe was forced to apologize afterwards.

    How many of you think that Obama should be forced to apologize to Joe Wilson today?

    Re: California disregarding the “Buy 1 get 3 free” provision of Obamacare.

    “When even California has stricter rules (than Obamacare) for a giveaway, that should tell you something,” Gaines said.”

    Yes, it does tell me something, Mr. Gaines. It tells me that the political streetwalkers in Sacramento have a higher loyalty to their corporate sugar daddy bosses in the medical industry than they do to their political allies in D.C. You please the customer who pays you the most first.

    Again, the primary problem with the US healthcare system in America is the medical monopoly that has been in operation throughout this country for many years now. ObamaCare did nothing to change that except shift the bulk of the new costs to the productive working class member of society. That’s really the only primary difference between ObamaCare and what we had before – besides women being forced to pay for prostate disease treatments and men being forced to pay for maternity care.

    Reply this comment
    • Ted Steele, CEO
      Ted Steele, CEO 24 November, 2013, 09:30

      Joe Wilson— What a classless twit and complete waste of space. He is a great example of the far right’s whacked out brand problem that will continue to keep them out of majority power—-

      Reply this comment
      • LetitCollapse
        LetitCollapse 25 November, 2013, 13:12

        Joe was a prophet and a patriot. He knew a liar when he heard one. And he had the courage to call him out before the nation. Yet he was forced to apologize when he merely spoke the truth. When he said the emperor wore no clothes. More evidence of a declining empire. When truth is punished you know we’re in a nose dive.

        Reply this comment
  2. LetitCollapse
    LetitCollapse 22 November, 2013, 14:24

    Even liberals with eat their own or throw the poor under the bus if the price is right! lol.

    Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 22 November, 2013, 22:35

    Why don’t you do something to save us……the rants are truly the pathway to your leadership greatness.

    Reply this comment
  4. Ted Steele, CEO
    Ted Steele, CEO 24 November, 2013, 09:34

    Great article Tori— very balanced and not loaded with the usual ranting hyperbole this website is noted for. Any day without Tony is a pretty good day, no???

    Reply this comment

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