Starting in January, the federal Affordable Care Act (ACA) will require all residents to secure health insurance or pay a $95 tax penalty, assessed only if the filer qualifies for a federal tax return.  

The problem is that nearly one million Californians earning between $1,292 and $1,859 per month would be expected to purchase insurance that today starts at about $440 per month.  At this price, hardly anyone believes that either the tax penalty threat or the federal subsidies provided to offset part of that premium will motivate many of these individuals to purchase health care coverage, so they will join the residually uninsured pool of people left behind by health care reform.

Covered California, the first state health benefits exchange in the nation, is in the process of creating an affordable bridge to coverage for these individuals.  Essentially, the plan would extend basic health benefits at prices wholly covered by the federal subsidies provided for people in this income bracket; they would not have to use any of their sparse income to pay for health insurance premiums.

The ACA provided for a similar “basic health plan,” but unlike Covered California’s plan, it would operate outside of the health benefits exchange.  Moreover, federal officials recently postponed implementation of this option until 2015, stranding this population for the first year of the individual mandate to have health insurance. Click here to read a more detailed explanation of the program that I prepared for Southern California hospital executives.

Kudos to Covered California for its creative repair work on a serious flaw in the ACA.

Your thoughts?