California residents got a raw message from the head of its ObamaCare Exchange: Don't "p—" away your money by failing to get covered.
Covered California’s CEO Peter Lee used blunt words to warn residents that if they don’t enroll or re-enroll for coverage or provide proof of any healthcare coverage they face steep penalties for their families next year thanks to ObamaCare’s individual mandate.
Lee made those comments while announcing that more than 217,000 new clients had signed up for plans in the state healthcare exchange. The goal is to sign up 500,000 new clients and get their 1.2 million current customers to re-enroll bringing their total enrollments to 1.7 million signups by the time open enrollment closes February 15. Compared to other states, California's states exchange has managed not to fall apart and has skated by many of the problems that have plagued other state exchanges.
However, the key to their success is the availability of subsidies. As much as 90 percent of the 1.2 million received a federal subsidy to help them pay for their premiums in 2014. Without which we wonder if they would have signed up – so much for the Affordable Care Act actually being affordable!
The penalties Americans without coverage face won't be negligible either. The fines which will be deducted for expected tax returns will be at least $325 per adult, and half that amount per child, but can be as high as 2 percent of household income in 2015. For example, a family of four making just $30,000 annually would face a $975 fine. According to Covered California, estimates place as many as 1 million or so Californians could be subject to the fine.
In a briefing with reporters, Lee noted that a family of four that opted not to get coverage in 2015 could end up paying "a $1,000 penalty that is essentially being p—– away."
Instead of paying that fine, Lee said, that same family could use the money to buy insurance through the Covered California exchange, which would protect the family financially if they needed health-care services that without a health plan would strain their budget….
He said that "we want to use the tax penalty" as an incentive to get currently uninsured people to sign up in the state. "We want to get out the message, loud and clear, that if you sign up at any time during open enrollment, you will not be subject to the penalty."
"For many consumers, understanding the penalty makes a difference," Lee said. "Many do not understand the penalty, or the size of the penalty, and that's exactly why we're ramping up the messaging about the penalty."
Tomorrow is the deadline for getting coverage that begins Feb. 1 and by Feb. 15, when open enrollment will close, everyone must demonstrate coverage or face a wallop to their pockets thanks to the President.
Even if current enrollees are automatically re-enrolled, which it appears that the "very significant portion of people" in California will be, according the state exchange, they may be shocked by the new amount of their monthly premiums. As we reported, re-enrolling customers are contending with premium increases in the mid-to-high single digit. If they are automatically re-enrolled they won't be able to shop around for better plans and prices (even outside of the ObamaCare exchanges) but will be stuck with their current plans at higher rates.
The answer to this problem shouldn't be higher subsidies. In fact, subsidies shouldn't be the critical element that keeps ObamaCare afloat. True reform should lower the costs of providing healthcare to patients and providers and so absent the largess of taxpayers.