As I explained in Part 1 of this series, one of the biggest features of Covered California, the state’s new health benefit exchange, is how it was set up. Established to implement the federal Affordable Care Act, usually called Obamacare, the state program covers health care.

But it also uses activist organizations connected to the Democratic Party to register people to vote. The funding also will boost the budgets of these organizations.

In addition, the newly created Obamacare health exchange “Assisters” will be trained to sign people up for social services, including welfare, food stamps and housing assistance, according to Community Health Councils, Inc.

In 2012, the California Legislature passed Senate Bill 35, by Sen. Alex Padilla, D-Pacoima. It required that voter registration be part of the health insurance exchange.

SB35 creates “voter registration agencies” largely through state social services agencies. The law requires anyone applying online for service or assistance, or submitting a recertification, renewal or change of address form, to be provided an online “voter preference form.”

Effective January 1, the California Department of Social Services issued a new All County Information Notice to county welfare directors and state and local National Voter Registration Act agencies regarding compliance with SB35.

CalFresh, California Work Opportunity and the Responsibility to Kids (formerly CALWORKs) programs are now required to provide welfare and food stamp recipients a voter registration card, “regardless of whether they indicate they want to register of not,” according to the Department of Social Services. “Under federal law, the NVRA requires states to provide voter registration opportunities at all offices that provide public assistance and all offices that provide state-funded programs primarily engaged in providing services to person(s) with disabilities. All applicants and continuing clients must be given a voter registration card (VRC) and an NVRA Voter Preference Form, regardless of whether they indicate they want to register or not.”

The agencies are required to “Provide and collect a voter registration card, and
 provide and collect a NVRA Voter Preference Form.”

Covered CA originally exempted from open record keeping

A state law passed in 2010 granted Covered California broad exemptions from the California Public Records Act. This would have limited the public’s right to access information about the contracts issued by Covered California, and the rates of payment to companies and individuals.

Five Republican U.S. senators sent a letter in June to U.S. Department of Health and Human Services Secretary Kathleen Sebelius demanding a federal investigation into California’s exchange policies on concealing information. “We see no reason why a state that has been awarded nearly $910 million in federal taxpayer dollars should not disclose how that money is being spent once a contract is finalized,” the senators wrote.

After the letter, the state Legislature made an about face and passed new legislation, SB332. State Sens. Bill Emmerson, R-Redlands, and Mark DeSaulnier, D-Concord, co-authored SB332, to ensure that Covered California is subject to the Public Records Act. “This bill requires that non-health plan contracts entered into with the exchange — such as those for consulting, marketing, and other professional services — as well as the payments for those contracts be accessible to the public immediately, just as they would be with any other state agency,” explained think tank California Healthline in a recent op ed.

It was signed into law on Sept. 11 by Gov. Jerry Brown.

Immediate issues with Obamacare implementation

According to Craig Gottwals, health insurance expert and attorney, there will be several immediate issues with Obamacare implementation in California:

1. There will be technical and computer glitches everywhere in the new system.
2. There will be rationing. With millions of newly insured in the market, companies like Blue Cross said they plan to be using roughly only half of their network for the health exchange. This is bound to cause  shortages, which will also impact those not insured on the health care exchange.
3. Subsidies will be abused. Even the super rich in California will be able to get health care subsidies because the subsidies are solely based on income, and not net worth. Assets don’t matter. Someone with a $100 million stock portfolio might earn just $60,000 in salary and so be eligible for the subsidies.
4. Because there are four different subsidies within the $20,000 to $90,000 income range, lower-income employees will tell employers to hold off on raises if it throws them into a different subsidy bracket with lower payouts.

As California continues taking the lead in implementing Obamacare, officially called the Affordable Care Act, the state’s health care insurance “exchanges” are expected to serve as a model for exchanges in other states. The exchanges are being set up under legislation signed by Gov. Arnold Schwarzenegger in 2010.

But not all the money is going for doctors, pills and operations.

The California Legislature and the new Covered California health insurance exchange are handing out more than $500 million in taxpayer dollars to contractors. Much of the money is going for “outreach” and “education programs” connected to voter registration drives through the health exchanges.

In 2012, the Legislature passed Senate Bill 35, by Sen. Alex Padilla, D-Pacoima, requiring that voter registration be part of the health insurance exchanges.

Covered California announced in May it would be awarding $37 million to 48 organizations to “conduct outreach and education programs” on how Californians can access “affordable health care coverage.”

Covered California is calling these “partnerships,” and the goal is to “increase awareness about the new benefits, to educate targeted audiences, and motivate consumers.”

$37 million in grants for outreach and education

According to Covered California, they are “developing educational partnerships that anchor outreach and education programs in communities where likely enrollees live, work, pray, shop, and play.”

The breakdown is:

* California’s Latino community, the largest group of potentially subsidy, will receive 37 outreach and education grants.

* Caucasians, the next largest group, will receive 24 grants;

* 32 grants will go to African American outreach;

* 11 grants target the Middle Eastern community.

* 20 grants specifically target outreach to the diverse Asian-Pacific Islander communities, including:

– 19 organizations targeting the Vietnamese communities;

– 18 targeting the Chinese community;

– 18 targeting the Filipino community;

– 16 targeting the Korean community;

– 11 targeting the Hmong community;

– nine targeting the Laotian community;

– eight targeting the Japanese community;

– eight targeting the Cambodian community.

Where did the money come from?

“The Obama administration granted a whopping $910 million to California to set up its insurance exchange,” according to Betsy McCaughey, Ph.D. McCaughey is a constitutional scholar, a patient advocate and health policy expert, and a former lieutenant governor of the state of New York.

She explained, “That money is not for bandages, surgery, nurses and doctors to care for the sick. Nor is it for insurance plans, though $910 million could buy generous coverage for at least 113,000 people!”

The $910 million was targeted not for actual health care, but for bureaucratic spending. McCaughy said this included $360,000 a year for the executive director, and other rich compensation packages for exchange employees.

Anything and everything can be defined as “outreach.”

$37 million goes to 48 contractors

Recently, Covered California announced $37 million in grants to 48 organizations to build public awareness about the opening of the health exchange on Oct. 1.

The 48 organizations received grants, but only  some of the grant recipients are even health-related. Each of the grant recipients had to present an outreach plan, and list their targeted population.

Here is a partial list:

* Asian Americans Advancing Justice received $1 million for outreach to nail salon owners, targeting Asian Americans, Hawaiians and Pacific Islanders.

* Cal State Universities received $1.25 million for outreach to student orientation and faculty events.

* The California NAACP received $600,000 for door-to-door canvasing throughout the state targeting African Americans.

* Planned Parenthood Mar Monte, Inc. received $694,000 for outreach at youth events, health fairs and community events, targeting young adults, young “invincibles” and members of young families. Planned Parenthood Mar Monte, Inc., serves 29 counties throughout mid-California and 13 counties in Northern Nevada, with  36 health center locations and 11 community sites.

* Coalition for Humane Immigrant Rights of Los Angeles received $940,000 for outreach to community, cultural and recreational events, targeting Latino and college students.

* The Los Angeles County Federation of Labor, AFL-CIO, the Central Labor Council for affiliated labor unions in LA County, received $500,000, for door-to-door education, targeting Latino students and low-income families.

* Los Angeles Unified School District received $990,000 for outreach calls to families, meetings with part-time and contract employees, targeting individual consumers, full-time adult education students and the part-time and contract employees.

* Sacramento Employment and Training Agency received $1 million for outreach to limited English proficiency individuals, low-wage, part-time workers and families transitioning from welfare to work.

* Service Employees International Union, Local 521 in San Mateo and Santa Clara counties, received $1 million for phone calls, door-to-door, community and group events, SEIU-sponsored events targeting uninsured SEIU member households, Asians, Pacific Islanders and Latinos. They will subcontract to SEIU Local 99 to do this.

* Another SEIU unit received $500,000, targeting long-term care workers’ households, multi-racial populations.

* The Los Angeles Gay and Lesbian Community Services Center received $1 million for outreach to social justice organizations targeting LGBT communities, primarily people of color.

* The regents of the University of California received $1 million, going to the UC Berkeley School of Public Health. They are planning outreach to consulate offices targeting Latino adults. But this will be done through 13 Latino organization subcontractors.

* Vision y Compromiso received $1 million for outreach in Spanish at ESL and GED classes at adult schools.

* This $37 million in grants is only the first chunk of California’s $190.4 million slated to be spent on  “outreach.”

The full list of grant recipients is available through Covered California.

Part 2 tomorrow

By Katy Grimes

As more regulations are discovered in the 2010 Affordable Care Act, more people are realizing the impact of the legislation. And California looks as if the law could hit it hard.

CA medical claims will jump 62 percent 

According to the Society of Actuaries, financial risk analysts, nationally, medical claims will jump an average of 32 percent for Americans’ individual health care policies under President Barack Obama’s government health care plan.

For Californians, it will be even worse: 62 percent.

But even with clever private sector work-arounds, California lawmakers, led by a Democratic supermajority, are leaving nothing to chance, nor any flexibility for employers. This is a do-it-or-die deal.

California, the first state in the nation to establish an ObamaCare Health Exchange, is working apparently to set a new low in government-driven healthcare ideology with what some are referring to as “CaliCare.”

AB 880, by Assemblyman Richard Pan, D-Sacramento, is a bill which essentially would force large businesses to offer health insurance by fining them more than the average cost of providing coverage. Money raised by AB 880 is meant to increase Medi-Cal provider rates, and to subsidize state costs for it.

“AB 880’s monetary penalty is written purposely vague but sure to be painful to business,” health care expert and lawyer Craig Gottwals with BB&T-Liberty Benefit Insurance Services told me.

“The proposed penalty on employers is based on 110 percent of the average cost of health care coverage, including both the employer’s and employee’s share of the premium.”

Gottwals found:

“According to the Kaiser Family Foundation, the national average cost for individual health care coverage in 2012 was $5,615 and family coverage was $15,745. It is unclear whether AB 880 sets the penalty level at the individual or family level of health care coverage but even if it were set at the lower individual level it would be 110% of $5,615 or a cool $6,176.50 per employee in 2013. That is over three times the federal penalty for not providing healthcare to an employee under PPACA.”

According to the bill:

“The amount of the employer responsibility penalty shall be adjusted annually to reflect changes 
in the average cost of coverage provided by large employers to their employees.” 

The law would apply to private employers with 500 or more employees in California and for employees working as few as 8 hours per week.

AB 880 also exempts governments:

“‘large employer’ shall not include a state, 
city, county, city and county, district or any other governmental employer. … An employer responsibility penalty shall not be incurred by a state, county, city, city and county, district, or any other governmental entity.”

So the government, as it often does, exempted itself from the onerous burdens it’s placing on the private sector.

The many exemptions and exempted groups have been ignored by most of the media. The law reads:

 “HHS regulations also provide that the hardship exemption will be available on a case-by-case basis for individuals who face other unexpected personal or financial circumstances that prevent them from obtaining coverage.”

“The shared responsibility payment (IRS penalty) should not apply to any taxpayer for whom coverage is unaffordable, who has other good cause for going without coverage, or who goes without coverage for only a short time.”

IRS exemptions

The IRS’s allowable exemptions include nine categories of individuals who are exempt from the shared responsibility payment:

* Individuals who cannot afford coverage;

* Taxpayers with income below the federal filing threshold;

* Members of Indian tribes;

* Hardship;

* Individuals who experience short coverage gaps;

* Religious conscience;

* Members of a health-care sharing ministry;

* Incarcerated individuals; and

* Individuals who are not lawfully present.

These exemptions leave mainly the working middle class paying income tax to pick up the tab for most of the system.

We also are finding that

* Most of the middle class will not be able to afford the insurance, and their children will not be covered.

* The half of Americans who do not pay federal income taxes will not be required to pay the “mandatory” IRS fine if they do not buy government health insurance.

* Illegal immigrants will not be fined for not having insurance.

And just in case anyone else was missed the exemption list, the last paragraph was added to cover any other vulnerable group:

“The HHS regulations also provide that the hardship exemption will be available on a case-by-case basis for individuals who face other unexpected personal or financial circumstances that prevent them from obtaining coverage.”

“Healthcare costs have increased 170 percent over the past decade,” said Gottwals. “AB 880 will make for one steroid-induced penalty for state rulers to plunder in upcoming years. Perhaps we can take the Bullet Train to new state-funded clinics?”

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.