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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 The Republican Congress and the Trump administration have repealed that federal penalty, effective next year.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

California’s Democratic legislators want to extend health benefits to undocumented young adults, the continuation of an effort that ushered children without legal status into the state’s publicly funded health care system last year.

It is unclear when the program would start or how much the state would spend if the proposal, which could cost up to $85 million a year, is approved by Gov. Jerry Brown. Lawmakers are working out details ahead of their June 15 deadline for passing a new budget.

The plan would provide full-scope coverage for 19-to-26-year-olds who qualify for Medi-Cal, the state’s name for Medicaid. Currently, the federally funded program covers only emergency visits and prenatal care for undocumented residents. Under the proposal, revenue from taxes on tobacco products would absorb expenses for all other coverage.

Democratic Sen. Ricardo Lara of Bell Gardens has been one of the strongest voices for expanded care. In 2015, he pushed for coverage for all adults. That proposal was changed to admit only undocumented children; it took effect last year. This year, he said in a recent video message to supporters, “We are going to make the final push to ensure we capture our young adults.”

Supporters’ ultimate goal is to include all undocumented adults, said Anthony Wright, executive director of Health Access California, a health care consumer group backing the proposal.

“We believe without coverage, people are sicker, die younger and are one emergency away from financial ruin. It has consequences for their families and their communities—both health and financial consequences,” he said.

The plan would mean that undocumented children currently in the program would not age out at 19, putting low-income undocumented immigrants on par with those allowed to stay on their parents’ insurance under the Affordable Care Act (often called Obamacare) until they are 26.

Republican Sen. John Moorlach of Costa Mesa opposes an extension of benefits. One reason is financial: California doesn’t have “a balance sheet we can brag about,” he said, citing the state’s debt load, among other reasons.

Secondly, he disapproves of illegal immigration. Moorlach migrated to the U.S. legally as a child with his family from the Netherlands.

“I’m kind of offended that we feel an obligation to pay for expenses for those who did not come through the front door,” he said. “I certainly have compassion and want to help people in need, but I’m having difficulty, as a legal immigrant, because we are already in such bad fiscal shape.”

Advocates argue that undocumented immigrants help propel California’s economy with their labor and the taxes they pay, and that they cost the state money when they don’t work because of illness or when they end up in the emergency room.

“Health care is a right,” said Ronald Coleman, director of government affairs for the California Immigrant Policy Center, an advocacy organization and supporter of the proposal. “These are folks we are investing in through the California Dream Act and through other programs our state offers, and it makes sense to invest in our future, which our young adults will be.”

Estimates vary for how many people this expansion of Medi-Cal would serve and what the costs would be. Each house of the Legislature has passed its own version of the proposal, with differing figures attached.

The Assembly allocated $54 million a year to cover an unspecified number of additional enrollees, with a July 2017 start date. The Senate proposed $63.1 million in the first year, beginning in 2018, and $85 million annually thereafter, also without specific population numbers.

Coleman’s center, which is working closely with lawmakers on the issue, estimates about 80,000 new people would be eligible, and the cost would be around $54 million a year. That assumes the federal Deferred Action for Childhood Arrivals program continues, because it provides access to Medi-Cal. If DACA were eliminated, the figures would increase to about 100,000 eligible people and about $84 million in annual costs, Coleman said.

The governor’s proposed budget does not include the proposed expansion or any money for it.

Kevin, a 19-year-old Angeleno who asked that only his first name be used, because he lives in California illegally, wants the proposal to succeed. He has been working for more than a year to distribute information about Medi-Cal children’s coverage to immigrant families.

He meets all but one of the requirements for DACA: He was not in the country before June 15, 2007. He arrived in the U.S. in 2011 at age 14 from Guatemala, on a visa that later expired. He graduated high school, has no criminal record and is now majoring in business administration at California State University, Los Angeles.

“There’s this misunderstanding that young people are healthy,” said Kevin, who suffers from eczema. He worries about the chronic condition flaring up. “When it gets worse, it doesn’t let me do anything with my hands.”

He is enrolled in a county health insurance program for low-income residents, but he can’t afford a dermatologist. He can barely pay for the prescription lotion he uses for the eczema, and sometimes goes without it.

“We are trying to have a better economic standard, and we are like the building blocks of this society,” he said. “Having health insurance will allow us to focus more on school and do our regular day-to-day activities. A healthier society works better for everyone.”

If lawmakers can now agree on details, a consensus proposal will go to the full Legislature for approval. The deadline for that is June 12.

CALmatters.org is a nonprofit journalism venture dedicated to exploring state policies and politics.

Published in Local Issues