Covered California Transfer to Medicare Is Fraught with Peril

Tuesday, December 09, 2014

While people struggle to enroll for Covered California’s subsidized health insurance, a smaller, but growing, group of people are struggling mightily to get out.

Emily Bazar, who writes the Ask Emily column at the Center for Health Reporting, warned an inquiring reader a couple weeks ago to get out of the healthcare exchange before signing up for Medicare at 65. Otherwise, they might end up owing hundreds or thousands of dollars for the monthly Covered California subsidy that lowered the premium. Both are primary insurance and a person can have just one of those.

Bazar quickly convinced became that was easier said than done. “How do you propose to get Covered California to cancel anyone?” one anguished reader asked. “We have been trying since August and are exasperated. … My insurer keeps billing us. This is a NIGHTMARE!”

Bazar detailed the plight of the Wooleys, a couple who called Covered California August 1 to cancel their plans on September 1 and October 1 to begin their respective Medicare coverage. But the bills kept coming from their Kaiser Permanente plan. Kaiser said they couldn’t discontinue coverage until they heard from Covered California and Covered California said they had already done that.

Stalemate ensued. The Wooleys’ tax credits of around $1,000 a month are adding up and will be unavoidable at the April 15 IRS filing deadline.    

Bazar only has anecdotal evidence to support her contention that this is probably a widespread problem. Covered California expects to enroll 1.7 million people and a lot of folks become eligible for Medicare every year. A Sacramento insurance agent told her he heard the problem was widespread and a Kaiser representative said the Wooleys were by no means the only sufferers.

Bazar’s information is largely anecdotal because the only response she officially got from the agency was an unhelpful boilerplate suggestion that people who want to cancel their policies “should contact the Covered California service center for assistance to ensure their coverage is terminated consistent with their requested date of termination.”  

Unofficially, she was told by someone at the exchange that a computer programming problem was fouling up the cancellation process. That’s not hard to believe, considering the myriad computer problems that have plagued the system since it opened for business last year.

Covered California has no trouble disenrolling people when the exchange wants to. There have been a lot of complaints about folks suddenly finding their policies abruptly cancelled with a note that they have too little income and qualify for lousier Medi-Cal, California’s version of Medicaid.

Covered California indicates it should be that easy (pdf) for customers to bail. The Participant Guide 2.0 says, “For voluntary disenrollment it would occur within 14 days after the termination is requested by the enrollee if not given reasonable notice. If reasonable notice is provided, the termination date will be the date the enrollee specifies.”

Or not.

–Ken Broder


To Learn More:

It’s Not Easy to Check Out of Hotel Covered California (by Emily Bazar, Center for Health Reporting)

New to Medicare? Drop Covered California Fast (by Emily Bazar, Center for Health Reporting)

Patients Unexpectedly Shunted from Covered California to Medi-Cal (by Ken Broder, AllGov California)

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