Covered California Unsustainable?

Aaron Bandler
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Posted: Jun 25, 2015 2:30 PM
Covered California Unsustainable?

I remember when I was guest hosting for The Armstrong Williams Show a couple of years ago, and I was debating Obamacare with the Elder Chicks. They touted the state exchanges in Obamacare, and cited Covered CA as an example of the exchanges working.

Unfortunately for the Elder Chicks and other supporters for the law, Covered CA is not working. In fact, it is going bankrupt.

A report from CalWatchdog says that Covered CA’s enrollment numbers are too low, and as a result it will go bankrupt without any federal funding.

The report cites Lanhee Chen of the Hoover Institute, who said that Covered CA only has 1.27 million enrollees, when they expected 1.8 million. Covered CA also only kept 65% of their enrollees.

Chen points out that Covered CA makes money off of each enrollee, and while they are expecting $242 million in revenue, the lack of enrollees will put them well short of that number and will be “unsustainable”.

This should not be surprising. Critics of Obamacare have warned about the “death spiral” of not having enough enrollees that would result in premium spikes. What we are seeing with Covered CA is the death spiral happening before our very eyes.

Chen said that the bureaucracy was a huge factor for the lack of enrollees.

“Covered California required Californians who wanted to buy subsidized coverage to complete their enrollments by telephone, even where a Web-based option was available,” Chen told The Heartland Institute. “This added layer of bureaucracy is demonstrative of why Obamacare is driving up costs in our health care system and ultimately making it more difficult for people to get access to quality, affordable health coverage.”

Back in October, Chriss Street at Breitbart wrote that his premiums had increased 75% over two years when being forced into Covered CA; Covered CA of course touted that the fact their premiums only increased 4.2% (which isn’t necessarily something to be touting).

A contributing factor of the higher premiums was because they covered services that Street and his wife didn’t want or need.

“Such ‘medically necessary benefit’ includes gender reassignment, needle exchanges for heroin addicts, smoking cessation treatments, SSRIs (such as Prozac) for ‘normal’ people who want to feel ‘better than normal’, birth control, fertility, surrogate mother fees, sperm bank fees, stomach stapling for weight-loss, liposuction, weight loss foods and supplements, and eye-rounding,” Street writes.

When covering those kinds of services, doesn’t it make sense that Covered CA would be expensive and that people would rather than take the individual mandate penalty instead of enrolling?

But there’s more- Street describes horror stories of trying to login to the Covered CA website to renew his insurance policy only to fail and have to call a help line, to no avail.

“In frustration, I called the (800) 300-1506 help line and the automated attendant stated all representatives were busy and ‘your call wait time is ten minutes,’” Street writes. “Six minutes later a representative came on the line. Her first question was, ‘Are you a registered voter.’”

Keep that in mind- these bureaucrats care more about registering enrollees into the Democrat party than actually taking care of their health.

Street’s frustration with Covered CA is not an anomaly. Sheryl Attkisson over at The Daily Signal has a two-part expose on the incompetence, corruption and mismanagement inside Covered CA- which remember will cost at least $1.2 billion more than the state budgeted for- and it is certainly worth reading both in full. But there are sections worth highlighting.

Attkisson chronicles the stories of Aiden Hill, who at one point was the project manager of Covered CA’s call center. Hill said that from the get-go, it was clear that Covered CA was going to fail. The website was failing even before it launched, and when it did launch, the website and call center shut down in the first hour.

Consequently, customers had to fill out 33 pages of paperwork that didn’t match the electronic version. But Covered CA counted duplicate applicants as more enrollees, and gave false enrollment numbers to make it seem like they had a high number of people signing up.

Hill also was concerned at conflicts of interest with certain contractors, as well as other mismanagement and tried to flag it, resulting in Covered CA firing him.

Given this information, the latest news of Covered CA on track of going bankrupt should not be surprising. In fact, Governor Brown is proposing merging the failing Covered CA exchanged with the failed Cover Oregon exchange- expecting two wrongs to make a right.

Covered CA represents everything that is wrong with Obamacare, and with big government- the bureaucracy cannot be trusted to micromanage our lives, and is in the end unsustainable. Unfortunately, we the taxpayers will have to pay for it.

This was originally posted at the East Bay Young Republicans website.