Newly Enrolled in Covered California — One San Franciscan’s Story

Screenshot from CoveredCA.com, the website of Covered California.

Screenshot from CoveredCA.com, the website of Covered California.

Covered California will not be releasing any enrollment figures until mid-November, but San Franciscan Paul Cello says he’s already in — and reports his new insurance will have better benefits, at lower monthly cost than the plan he’s on now.

Cello originally hails from Florida and says he has friends there who are not fans of the Affordable Care Act. So he didn’t delay.

“I really wanted to be one of those people who got in line and said, ‘Look, this is a good thing,’” he said, “so I could really see what are the plans and how much do they cost.”

He enrolled in a Blue Shield PPO plan with a $1,500 deductible and maximum out-of-pocket costs of $5,000. Because he qualifies for a subsidy, he’ll pay $178 a month, shaving more than $300 a month off what he pays now.

“It’s like a whole ‘nother world,” he enthused. “The coverage is better … a lower premium, no pre-existing condition exclusions, I get mental health coverage, so there’s way more coverage than I had and I’m going to be saving.”

Cello had employer-based insurance until 2003 when he left his job, then continued insurance with COBRA. But once that ran out, he was denied coverage on the individual market due to a heart defect he was born with — what he termed a “wiring problem” in his heart. He says the issue has never troubled him (although he might one day need a pacemaker), and that his health is good.

It showed up in a routine EKG, he said. “Once it’s on your record, (insurers) can deny you.”

He finally found insurance on the state’s high risk insurance plan. But benefits were limited and the chief drawback was the annual max — $75,000. It’s easy to imagine that a car accident or cancer diagnosis would send someone over the top pretty quickly.

“It always felt like if anything big happened, I was going to be in trouble,” he said.

Cello described himself as a freelancer — he’s both a theater director and has his own consulting business. “My income really fluctuates,” he said. In the last few years, he says it’s been around $50,000 a year.

But that’s his gross income. Under the Affordable Care Act, subsidies are available for individuals with modified adjusted gross income up to $46,000, meaning people can subtract unreimbursed business expenses from their gross income. Those deductions brought Cello’s income down enough to earn him the subsidy.

[Related: Learn more about the ACA in KQED’s guide: Obamacare Explained]

As far as the sign-up process itself, Cello didn’t find it too painful, although he did give up on the first day. By Wednesday, he says, traffic had “calmed down.”

He found the process of creating an account and entering income “pretty straightforward,” but when it got to actually picking a plan, “you really have to do your homework,” he said. He says he used charts on Covered California to compare plans, something that was already familiar to him.

“It could be a little overwhelming for people who have not signed up for insurance” in the past, he said.

Cello says he’s had to make all kinds of choices because his insurance has been such a big expense — “things like, not being able to put money away for savings,” he said.

“I have been waiting very impatiently for Jan. 1, 2014.”

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  • annjohns

    “un-reimbursed business expenses” eh? This is going to be ripe for deception. He “saves” $4000, taxpayers pick up the remaining costs. By the way how old is Cello?

    • KarenCA

      He didn’t “save” $4,000 that someone else had to pay, he used allowable business expenses to reduce his gross pay. That’s legal – we all do it on our taxes (charitable contributions, business expenses, child care, etc.). If he fudged it, he would be subject to tax penalties. The reduced gross pay means he’s eligible for subsidies on a sliding scale (the more you make, the less help you get). News flash – if he did not have this opportunity and, heaven forbid, had a health issue, tax payers would pay for it. This way, he pays premiums and co-pays. And, he’s more likely to stay healthy because he now has access to primary care.

      Thanks for the story, California Report. Very interesting.

      • annjohns

        He avoided four thousand dollars in taxable income making him eligible for three thousand dollars of tax credits for his health insurance. what about the poor schmo working for wages who can’t claim “business expenses” earns a dollar over the line and pays it all?

        • KarenCA

          You are wrong. The $300/mo. savings is from what he currently pays an insurance company. It is not what he would save compared to what others will pay for Covered CA. Also not sure why you are putting business expenses in quotes. Are you trying to say his expenses are not legitimate? I’m not sure how you would know that. Isn’t that for the IRS to decide? You are arguing tax code but the story is about how the ACA is benefiting real people.

  • Eye Roller

    Funny how someone that seems to know absolutely nothing about how tax returns are done for a business will feel free to make snotty comments.

  • jskdn

    The savings this man realizes over his current, pre-exchange insurance costs that are due to his eligibility for tax subsidies in the exchange is not the same as the savings that eligibility could produce after exchange coverage begins as compared to those not eligible for subsidies. That will be what an insurance company will be charging for the second least expensive silver plan for a person his age, living where he lives as compared to the share of his income the ACA requires that people from 100% to 400% of the Federal Poverty Level spend towards premiums. For younger people there might be no savings but for those who are older, for whom insurance companies can charge up to 3 times the premiums charged to young people, it can be substantial. That’s even more true for families. The ability to effect, as well as the consequences of, being on either side of that 400% of FPL subsidy cliff will be important to the economic well being of some people but has been covered poorly by the news media.

    I thought that a goal of the exchanges was to provide standardized coverage, so that consumers could better compare insurance offering. But the California exchange’s standardized metal plan options don’t show a $1,500 deductible and maximum out-of-pocket costs of $5,000 as one of the standards. I believe the silver plan has a $2000 deductible and the bronze plans have a $5000 deductible. Both have $6,350 maximum out of pocket per year. Blue Shield doesn’t seem to show what the article described for its exchange plans.
    https://www.blueshieldca.com/bsca/find-a-plan/health-plans/individual-family/metal-level-plans.sp#enha

    There’s also a worthwhile reporting that could be done regarding the comparison between state’s high risk plan this man was in and the Pre-Existing Condition Insurance Plan funded by the ACA but run by the state, which was vastly more generous, so much so that it used up all the money allocated for the program, at which time those running it chose to simply deny any more of those who were eligible for the program access to any help at all. In fact, I believe it was more generous in benefits and in what people have to pay that those who have insurance because they bought it and kept paying premiums before they developed medical conditions that would have disqualified them.

    • KarenCA

      Brevity is your friend.

      • jskdn

        What part of my comment should have been excluded without losing real information? Why did you feel the need to just restate what I wrote about his savings?

        • KarenCA

          Um… I commented before you did so I didn’t restate anything. Besides, I got tired reading your first two run-on sentences so I couldn’t restate anything I didn’t even read.