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In a scramble to keep people enrolled in health-care plans, what did New Jersey, Vermont and the District of Columbia do earlier this year that California has not done?

They began requiring that their residents carry health coverage or face a state penalty for going without it. Such “individual mandates” aim to replace the federal mandate—perhaps the most controversial but essential part of the Affordable Care Act, often called Obamacare —that sought to force people to sign-up for health insurance or pay a tax penalty. The Republican Congress and the Trump administration have repealed that federal penalty, effective next year.

The clock is ticking. Obamacare has led to a record number of Californians having medical coverage. But a new study warns that if the state does nothing to counteract the Trump administration’s moves to undermine Obamacare, up to 1 million more Californians could be without health insurance within the next five years.

What’s kept California from enacting its own mandate? Some state Democratic leaders are wary of enacting a state mandate without also making health insurance cheaper for Californians.

“Providing subsidies is a better reality for members of our community than providing penalties,” said Assemblyman Joaquin Arambula, a Fresno Democrat who co-chaired the select committee on universal healthcare that conducted town halls across the state last summer. “It’s the carrot versus the stick.”

Sacramento State Sen. Richard Pan, a Democrat who chairs the Senate Health Committee, said the Legislature is focused on keeping the state’s insurance market exchange, known as Covered California, strong. Some 2 million Californians buy health coverage through the exchange, which provides federal subsidies to low-income purchasers.

“We are going to do what we can in California to stabilize the insurance market, to do what we can to make health insurance, particularly on Covered California, affordable,” said Pan, who has not yet endorsed any particular remedy. “We are up against a federal administration that is doing the opposite and forcing people to pay higher premiums.

“As we look at options—like do we want to do an individual mandate?—we also need to recognize part of what is driving that is not only the removal of the federal mandate, but also actions taken to increase insurance premiums,” said Pan.

Since the Affordable Care Act was implemented in 2013, the state’s uninsured rate has dropped from 20 percent to 7 percent. Currently, 3.4 million Californians are uninsured, with undocumented immigrant adults making up the majority of that group.

But without more aggressive state intervention to counter Washington’s retreat from the program, an estimated 500,000 to 800,000 more Californians under 65 will be uninsured by 2023, according to the new study from the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research.

A mandate and state subsidies are among options the Legislature will be exploring to combat the expected exodus from insurance. But both are controversial. An Economist/YouGov poll found that 66 percent of Americans oppose a mandate. And although a few other states such as Vermont and Massachusetts do offer state subsidies, in California, state subsidies could cost up to an estimated $500 million, at a time when an incoming Democratic governor and Democratic supermajorities in the Legislature have promised pricey programs such as universal healthcare and universal preschool.

So far, Covered California enrollment, now underway through Jan. 15, is meeting projections—with a big caveat. As of the end of November, more than 90,000 newly insured people signed up, said Peter Lee, its executive director. But those projections already were lowered by 10 to 12 percent compared to last year, because it was unknown what effect the removal of the penalty would have on sign-ups.

“There’s no question that a penalty imposed on individuals for whom health insurance is affordable is a good policy,” said Lee, who said he would follow whatever rules the Legislature adopts. “The penalty encourages people to participate in a system that, if they don’t, we all bear the cost. And it encourages people to do the right thing for themselves.”

Covered California is working on a report commissioned by the Legislature on how to best bolster the system. It’s due in February, and Lee said a variety of options are on the table including a mandate, expanding subsidies and using state money to lower premiums, a process called reinsurance.

Some of those ideas echo the recommendations UC researchers offered in their study: incorporate a state mandate with penalty funds going to toward making insurance more affordable, state-funded subsidies in addition to the existing federal subsidies, and a Medi-Cal expansion to include low-income undocumented immigrants.

These are not new ideas, but they are politically and financially costly, said Gerald Kominski, a fellow at the UCLA Center for Health Policy Research.

“We know that the mandate drives people into the market,” said Kominski. “If you’re going to pay a tax penalty and not have health insurance, why not look for insurance when almost 90 percent of those who buy in through Covered California received some sort of subsidy?”

“The state could consider bringing the whole threshold down for everybody,” he continued. “The point is to lower the thresholds and make people pay less out of pocket. That would increase affordability for lots of families.”

Some advocates agree that a potential state mandate must also include a mechanism for making insurance more attainable.

“We don’t want to require people to buy coverage that they can’t afford. And what they can afford may be different in a high-cost-of-living state like California,” said Anthony Wright, executive director of Health Access, which advocates for consumers. “That’s why it’s hard to have a conversation about a mandate without affordability assistance.”

Under the federal mandate, Americans were compelled to carry health insurance or pay a penalty of $695 per adult, or 2.5 percent of household income, whichever is higher, unless insurance costs more than 8 percent of a household’s income.

With the repeal of that ultimatum, California is bracing for the biggest dropouts among its residents who have been buying insurance through the subsidized Covered California program. The program projects it could lose 10 to 30 percent of its participants.

But the state also expects wider losses, including among the 46 percent of Californians who get insurance through employers, because they also will no longer be required to have it. Even Medi-Cal, the state-paid program for low-income Californians, will lose about 350,000 people, the study estimates, because the lack of a federal mandate may deter people from seeking health coverage at all—meaning they’ll never discover they qualify for Medi-Cal.

Last year, the California Legislature considered creating a state mandate as part of budget discussions that included making insurance more affordable, but neither idea made it into the final budget proposal submitted to the governor.

Experts and advocates are hopeful that these ideas may gain traction under Gov.-Elect Gavin Newsom, who has talked a big game on health care and access pledging during his campaign to support single payer and universal coverage.

If more Californians drop their health insurance, everyone pays. People most likely to drop out are the young and the healthy, expert say. But they are critical to keeping the whole operation afloat, because the system cannot be made up of only sick people.

California already has taken steps to shore up the Affordable Care Act: banning short-term health plans, adopting legislation barring work requirements for Medi-Cal, and offering a longer open enrollment period.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

A teenage girl walks the hardscrabble streets of Richmond, a Bay Area city, rapping about the challenges of drugs, violence—and diabetes.

Here, she says, big dreams are “coated in sugar,” and innocence is “corrupted with Coke bottles and Ho Ho cupcakes.”

She’s performing in a video by a local youth group that counts diabetes—a national epidemic that has hit California hard—as one of the killers in her neighborhood. The disease, which is spreading and driving up health costs, now impacts more than half of the state’s adults, especially people of color and the poor.

Experts say it doesn’t have to be that way—that prevention programs can slow the march of the illness and save money at the same time. But efforts to legislate prevention—for example, taxing the sugary drinks whose consumption contributes to diabetes—have stalled in the face of heavy opposition by the well-funded beverage lobby.

The state will soon begin funding a program for anti-diabetes education, counseling and lifestyle coaching, but it’s a modest investment regarded only as a start.

“Investing more now in diabetes prevention and education will save our state billions of dollars down the road,” said state Sen. Bill Monning, a Democrat from Carmel who has proposed soda taxes in the past, and tried unsuccessfully this year to require warning labels on sweetened drinks.

A UCLA study last year found that 9 percent of adults in California have been diagnosed with diabetes, a chronic condition in which the body does not process sugar well, which can lead to blindness, heart disease, stroke and infections resulting in amputations. Forty-six percent—including about a third of those under 40—are pre-diabetic, with elevated sugar levels that will likely develop into diabetes.

That’s 55 percent of the state’s adult population swept up by the disease.

Treating diabetes costs government, private insurers and patients about $27.6 billion a year in California, for such expenses as doctor visits, testing, medication, surgery and hospital costs, according to the American Diabetes Association. The state and federal governments shoulder most of that expense through Medi-Cal, California’s health program for those living in poverty, as well as the national Medicare system that covers seniors.

A state audit of the California Department of Public Health diabetes-prevention efforts released two years ago said that California lagged in such spending. The state spent about $1 million from the federal Centers for Disease Control and Prevention, a sum that has since grown to $1.4 million, but did not devote state money to programs. New York, the audit points out, was spending $7.2 million, although some of that money went to anti-obesity programs.

Beginning in July, with the next budget, $5 million in state funds will go toward a nutrition and exercise program for pre-diabetic enrollees in Medi-Cal. That project, based on a CDC model called the Diabetes Prevention Program, can cut the risk of developing diabetes in half, according to the CDC. In addition, it is expected to save about $45 million in treatment expenses over the next five years, said Assemblyman Joaquin Arambula, a Kingsburg Democrat and physician who co-chairs a health subcommittee.

Flojaune Cofer, an epidemiologist and director of state policy and research for the nonprofit Public Health Advocates, said that about 25,000 people will be able to participate each year.

“We can’t just wait until people get sick, because it’s not a viable system,” Cofer said.

The largest state pension fund, CalPERs, began offering the CDC program to through its insurance plans this year, and Medicare will offer it nationally next year. It is also offered by some private insurers.

But adult-onset diabetes, or Type 2, doesn’t get the same attention as some other deadly diseases, such as cancer. Nor is it considered as blameless as Type 1 diabetes, a childhood disease diagnosed when the body produces little or no insulin.

Type 2 is considered mostly preventable by changes in diet and physical activity. But its spread has increased 32 percent in California in the past decade, according to state statistics. The disproportionate impact on low-income communities and people of color may partly explain why it gets short shrift, experts say.

“There’s a general belief that it’s slothful, lazy people making bad choices,” said Dean Schillinger, professor of medicine at the University of California, San Francisco; he’s a leading expert on diabetes and prevention, and was chief of the state’s diabetes-control program from 2008 through 2013. “But if you have to choose between buying a fast-food meal for your family of five for $15 or going to Whole Foods and spending $80 on health food, it’s very rational what people are doing.”

Add to those economics the marketing of beverages and snack foods to children, especially through targeted advertising in low-income communities, and you have a natural intersection for the disease, he said. A federally funded study released this year found that diabetes grew at a rate of 4.8 percent among children each year between 2002 and 2012.

“It’s an unacceptable state of affairs,” Schillinger said. “We can and must do something to prevent young people from having an amputation or being blind by the age of 30.”

Diabetes is also increasing among white people, Schillinger noted, just not as quickly. Sedentary lifestyles, fat-rich diets and time spent in front of screens large and small cut across all communities.

Another contributor is a health care industry that has been primarily focused on treatment instead of prevention, said Monning: “Prevention, including diabetes prevention, is not profit-generating.”

He and a handful of other state legislators have been trying to pass measures to slow the growth of diabetes for years, focusing on the role of sugar-sweetened beverages—because they are the leading cause of increased calories in children. The lawmakers’ targets include not just sodas, but also other sugary drinks camouflaged as more healthful: sports drinks, juices and enriched waters.

Monning tried this year to require labels on certain drinks to state that “drinking beverages with added sugar contributes to obesity, diabetes and tooth decay.” Other efforts have involved a statewide tax on such drinks, but that requires a two-thirds vote of the Legislature and has been a hard sell.

The beverage industry argues that the causes of diabetes are complex, involving much more than soda, and that the best way to build strong, healthy communities is to work together to “help people balance their calories and improve their diets,” said Lauren Kane, a spokeswoman for the American Beverage Association.

The group says taxes don’t work, and labels are misleading.

“America’s beverage companies are already helping people cut their sugar intake from beverages through our collective efforts to reduce portion sizes and introduce smaller, more convenient packages with less sugar,” Kane said.

But Monning blames the industry for pushing hard enough—and spreading enough money around Sacramento—to scare off the “yes” votes needed to pass preventive measures. The beverage group has spent $282,000 on lobbying in California so far this year, according to its required reports to the state. The two largest soda makers, PepsiCo and Coca-Cola, have spent about $248,000. And in the last five years, PepsiCo and Coca-Cola have contributed nearly $783,000 to state candidate campaigns, while the American Beverage Association gave $135,000, the filings show.

 There has been a slight decline nationally in the consumption of soda, studies show, although the void may be at least partly filled with other sweet drinks. Experts credit local measures to tax sweetened beverages and require warning labels on billboards that advertise them, among other moves.

Such taxes have been imposed in Berkeley, San Francisco and Oakland. Other cities, including Richmond, have tried and failed to pass them. San Francisco approved a requirement two years ago that certain beverage ads be labeled, but the beverage industry sued to block the measure in a case that is ongoing.

More local taxes and labeling requirements could prompt state lawmakers into action eventually, as plastic-bag bans throughout the state did, said Monning. Once a tipping-point number of cities outlawed the bags, it became easier for the Legislature to adopt a statewide policy.

Schillinger said he has seen firsthand that prevention efforts can stem, or even reverse, an epidemic tide. When he started his medical career, at the height of the AIDS epidemic, half of his patients were dying from HIV infection, he recalls. Within 15 years, that epidemic was pushed back by a combination of grassroots activity, well-funded public health work and scientific research, he said.

“At that time, one out of 15 to 20 of my patients had diabetes,” he said. “Flash forward, and I have no patients with AIDS who are dying. Our AIDS ward is empty. But instead, we have the diabetes epidemic,” and half his patients have the disease.

Schillinger lauds community awareness efforts, like the videos posted by Youth Speaks as part of its diabetes-prevention program. Even armed with statistics and an M.D. degree, Schillinger said, he has participated in too many disappointing policy discussions with lawmakers about diabetes.

“There has to be a different way to talk about this,” he said, “and it has to come from different people.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues