Even With Subsidies, Some San Francisco Residents Can’t Afford Covered California Premiums

The San Francisco Board of Supervisors is looking at helping that population afford insurance by providing additional subsidies funded through employer contributions.

In 2006 the city passed its landmark Health Care Security Ordinance, a step toward providing universal healthcare in the city. It requires businesses with 20 employees or more to offer employees health insurance or make a contribution toward their health care for every hour they work.

The board has directed the city and county’s Department of Public Health to come up with a plan by August 2015 for possibly using some of those employer contributions to help residents afford Covered California premiums and co-pays.

Instead of enrolling in Covered California, many of these low-income workers get their health care through Healthy San Francisco, a safety-net program partially funded by the employer contributions. It provides comprehensive health care at a network of clinics and hospitals for about a third of what it would cost to get health insurance under Covered California.

But Healthy San Francisco isn’t health insurance, and doesn’t cover members if they seek care outside the area. And at the end of next year, the program will no longer be open to those who are also eligible for Covered California, forcing them to enroll in the insurance exchange or go without benefits.

Despite the drawbacks, about 3,200 residents are opting to stick with Healthy San Francisco for the time being and pay the federal penalty for not enrolling in insurance.

Forced to change plans or pay

Tom Temprano, a former Healthy San Francisco client, said he was very happy with the care he got through the program. It helped him afford a surgery he needed after he seriously injured his ankle.

“If not for Healthy San Francisco, I’d be in debt the next 20 years,” said Temprano, who is self-employed as the co-owner of Virgil’s Sea Room bar on Mission Street and also does event marketing and consulting.

Just after the surgery, he got a letter informing him he qualified for Covered California plans and would have to buy insurance or pay a federal penalty for remaining uninsured.

Temprano said he felt bullied out of his medical home. When he switched to Covered California, his monthly health care expenses quadrupled. He now avoids going to the doctor due to the higher co-pays.

“I’m just crossing my fingers nothing happens,” he said.

He needs a second surgery to fuse bones to stop the arthritis in his ankle, but he won’t be doing that anytime soon, he said.

High cost of living makes insurance unaffordable

Temprano is not alone in his struggle to afford health insurance. There are thousands of people in San Francisco whose income is too high for them to qualify for Medi-Cal, the state’s low-income health plan, but too low for them to afford Covered California premiums.

Housing costs in the region are among the biggest barriers. According to the National Low Income Housing Coalition’s Out of Reach 2014 report, San Francisco is the most expensive metropolitan area in the country to live, requiring an hourly wage of more than $37, or $78,249 annually, for a two-bedroom rental home.

San Francisco Supervisor David Campos, who spearheaded the plan to use employer health care contributions to subsidize residents seeking Covered California plans, said he’s a great supporter of the Affordable Care Act. But he said it’s a problem that the insurance subsidies are the same regardless of where you live.

After the Covered California insurance exchange launched in January, and Medi-Cal expanded to allow adults without children to sign up, membership in Healthy San Francisco and a similar pre-Medi-Cal program decreased 51 percent. Many of the roughly 32,000 members who left enrolled in Medi-Cal or Covered California.

There are still almost 3,200 people enrolled in Healthy San Francisco who likely qualify for Covered California, said Colleen Chawla, deputy director of health for the San Francisco Department of Public Health.

Thousands face federal fines

On Oct. 7 the San Francisco Health Commission approved an extension through Dec. 31, 2015 for people who qualify for Covered California but who want to stay with Healthy San Francisco for another year. But those who choose to stay will be charged the federal penalty for not having health insurance. In 2015 that penalty is 2 percent of household income or $325 per person.

For some residents staying with Healthy San Francisco will be worth the penalty and will potentially be cheaper than getting coverage under Covered California.

If an individual earns $30,000 annually, less than 300 percent of the federal poverty level, the Healthy San Francisco premium would be $50 per month with primary-care co-pays of $10. Meanwhile, a Silver plan under Covered California would have a premium between $169 and $227 monthly and primary-care co-pays would be $45 each.

“We’re definitely seeing people who are eligible [for Covered California] and signed up and then saw the premiums and didn’t follow up,” said Dawn Harbatkin, medical director at Lyon-Martin Health Services in San Francisco, a nonprofit community clinic serving women and transgender people.

Almost all of the clinic’s clients earn below 200 percent of the federal poverty level, Harbatkin said. About 400 of the clinic’s 2,000 patients were eligible for Covered California but only about 100 actually enrolled, she said. And it remains to be seen if they will be able to continue to afford it, she added.

Campos reckons San Francisco won’t be the only city with a high cost of living to consider lending its residents a hand.

Alameda County comes the closest to what San Francisco is doing, said Anthony Wright, executive director of Health Access, a health care consumer advocacy coalition. In June residents voted to renew a .5 percent sales tax to improve healthcare for indigent, low-income and uninsured adults. It generates about $100 million annually.

“From a safety net point of view, is it better to have someone show up uninsured in an emergency room or provide some help so people can get some coverage?” Wright asked.

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