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California's health exchange is violating the law by canceling private coverage for up to 95,000 people because they might qualify for Medi-Cal, the state's insurance commissioner says.
At issue is health insurance for some of the poorest Californians whose incomes aren't high enough to even qualify for subsidized policies in the Covered California exchange.
The state marketplace is notifying thousands of policyholders that their federal premium subsidies for Obamacare coverage will end Dec. 31 and their private health plan won't be renewed starting in January. Instead, these people will be put into Medi-Cal, the state's Medicaid program for low-income residents reports the Los Angeles Times.
California Insurance Commissioner Dave Jones has been urging the exchange to reconsider. "The law is very clear. They can't cancel people," Jones said in an interview.
All this comes at a pivotal time for Covered California. The exchange is trying to renew more than 1 million policyholders during the second open enrollment under the Affordable Care Act and sign up several hundred thousand more before enrollment ends Feb. 15.
For months, the Medi-Cal program has faced a backlog of applicants, leaving some people to wait months to get coverage confirmed. The state said it has resolved most of that bottleneck and about 75% of applicants since Nov. 15 have been enrolled without delay.
"There will be no gap in coverage for these people," said exchange spokeswoman Amy Palmer. "We will make sure Medi-Cal kicks in immediately."
Palmer said the exchange is complying with the law and disagrees with Jones. She said the number of people affected should be less than 95,000, but she didn't specify a figure.