Medi-Cal and Obamacare: More confusing twists

Q: If my family of six qualifies for Medi-Cal under the Affordable Care Act, do we have to sign up for that? Or can we still buy subsidized health care plans through Covered California? … I have real concerns about the quality of care we would get on Medi-Cal. I’m hoping for a positive answer!

A: Sadly, I’m about to disappoint Beth from Modesto and others in her situation.

Medi-Cal is the state’s publicly funded health program for low-income and disabled residents, and currently provides care to more than 8 million Californians. (It is the state’s version of the federal Medicaid program.)

Starting in January, Medi-Cal will broaden its eligibility requirements as a result of Obamacare, allowing applicants with higher incomes and those who were previously ineligible, such as childless adults, to get coverage.

But whether you’re eligible for Medi-Cal now or become eligible then, that fact alone disqualifies you from tax subsidies on the health insurance exchange, which is called Covered California.

Covered California will offer 13 health plans across the state (not all in each region) that cover a standard set of benefits. Individuals and families who earn between 138 percent and 400 percent of the federal poverty level, or FPL, will be eligible for sliding-scale tax credits to purchase those plans.

(UPDATE: Covered California ended up offering 11 health plans in 2014.)

Theoretically, Beth, you could reject Medi-Cal and buy insurance on the exchange, but you’d have to pay full price.

“Anyone who is eligible for Medi-Cal but chooses this option would likely incur significant premiums and cost sharing,” says Norman Williams, spokesman for the state Department of Health Care Services, which administers Medi-Cal.

Sorry, Beth.

Q: My children had health coverage through Healthy Families, but had to transfer into Medi-Cal this year when Healthy Families was eliminated. We liked Healthy Families better than Medi-Cal. Will we be able to leave Medi-Cal and buy insurance on the exchange?

A: Roughly 860,000 California children have moved – or will move – from Healthy Families onto Medi-Cal this year after the program’s elimination by budget cuts. Healthy Families is a publicly funded program that covers children in families with incomes too high to qualify for Medi-Cal.

Once those kids are on Medi-Cal, the same rules will apply to them as to other Medi-Cal recipients: If they qualify for Medi-Cal, they won’t qualify for tax credits on the exchange.

But here’s a mind-boggling twist: Some parents of children in Medi-Cal may qualify for tax credits.

Come January, kids statewide will be eligible for Medi-Cal if their family income is up to 250 percent of the federal poverty level (FPL), about $59,000 for a family of four.

Under the Medi-Cal expansion, however, their parents will be eligible only if their income is less than 138 percent of the FPL.

So some parents who make between 138 percent and 250 percent of the federal poverty level and who are eligible for tax credits on the exchange may have children on Medi-Cal who are not.

“We’re going to have a lot of mixed-coverage families, where kids will be in Medi-Cal and parents will be in the exchange,” says Elizabeth Landsberg of the Western Center on Law and Poverty.

Q: I heard in the news this month that Obamacare is being delayed by a year. Is that true?

A: Yes and no.

One important piece of Obamacare is being pushed back until the start of 2015: The requirement that businesses with 50 or more employees offer affordable health insurance or face a penalty.

As my colleague Kelley Weiss notes, more than 90 percent of large California businesses already offer their workers coverage. So, while some Californians will be affected by this, it’s not entirely clear how many.

I’ll delve into that matter soon in an upcoming column.

But the rest of the law stands, which means that starting in January, insurance companies no longer can deny coverage to people with pre-existing medical conditions, Medi-Cal will expand eligibility and Covered California will offer tax credits to qualified residents who want to buy health plans.

And most people still will be required to carry a minimum level of health insurance or pay a tax penalty. That probably means you.

Unless the feds decide to delay that, too.

Learn more about Emily here.

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