Cheaper health care:
Report outlines ways for California to maintain coverage
Few states embraced the Affordable Care Act more enthusiastically than California, which shrank its uninsured rate to a record-low 7 percent after enrolling millions more residents onto Medi-Cal and creating a system to sell subsidized health plans to Californians.
Now, in anticipation of the health law’s individual mandate ending in 2019, state lawmakers and health officials may have to go it alone to preserve those coverage gains.
The state could take several steps to make health coverage more affordable for the 2.3 million Californians who buy insurance on the individual market, according to a report released Monday by health policy analysts at the UC Berkeley Center for Labor Research and Education.
At the top of the list: statefunded premium subsidies; state-provided financial assistance to help people pay deductibles and co-pays; and a cap limiting the percentage of income one can spend on health insurance premiums to 8 percent. The report outlines the options but does not make specific recommendations. It also does not include estimates for the cost of implementation.
It would be up to the state Legislature to come up with the funding for these programs, but some of the money could come from imposing a state-level requirement to buy insurance — which would collect tax penalties from those who do not, said Laurel Lucia, director of the health care program at the Labor Center who co-authored the report.
In tax year 2015, the federal government collected $377 million in tax penalties from Californians who did not have health insurance, according to preliminary IRS data.
At least one of the proposals
outlined in Monday’s report is already under consideration by Sen. Ed Hernandez, D-West Covina (Los Angeles County), chair of the Senate Health Committee, who is drafting a bill that would direct Covered California to provide state subsidies for health plans bought through the exchange.
The subsidies would lower the cost of insurance premiums for thousands of Californians who spend more than 8 percent of their income on health premiums. The subsidies could be financed by a $900 million pool of state money that was unexpectedly created when the federal government in January decided to fund the Children’s Health Insurance Program, which is jointly financed by the federal and state government, at a higher rate than the state budgeted for. The money would have to be appropriated by the Legislature.
“There’s going to be a lot of people trying to get to that cash,” Hernandez said. “Right now I think the priority should be trying to control health
“I think the priority should be trying to control health care costs.” State Sen. Ed Hernandez, D-West Covina
care costs.”
Under the Affordable Care Act, people who earn $16,600 to $48,200 a year are eligible to receive federal subsidies to buy health insurance. In California, about 1.2 million people do so through the state exchange Covered California. Some states and cities already provide additional subsidies to supplement federal subsidies, including Vermont, Massachusetts and San Francisco. In San Francisco, about 450 residents who buy federally subsidized Covered California plans also receive city-funded subsidies for premiums and out-of-pocket costs if they earn less than $60,300 a year and if their employer makes certain contributions to a city health fund.
Other proposals in the report have been discussed by the Assembly’s Select Committee on Health Care Delivery Systems and Universal Coverage.
The committee is drafting its own report, expected next month, that will “make recommendations that could provide a pathway to universal coverage in California,” said a spokeswoman for Assemblyman Jim Wood, DHealdsburg, who cochairs the committee.