Gov­er­nor’s health care bud­get has more help for Cov­ered Cal­i­for­nia

The Tribune (SLO) - - News - BY SAMMY CAIOLA This project re­sults from an in­no­va­tive reporting ven­ture — the USC Cen­ter for Health Jour­nal­ism News Col­lab­o­ra­tive — which in­volves print and broad­cast out­lets across Cal­i­for­nia, all reporting to­gether on the state’s unin­sured. Out­lets i

The re­vised state bud­get Gov. Gavin New­som re­leased this week in­cludes more sub­si­dies for Cov­ered Cal­i­for­nia en­rollees but doesn’t ex­pand Medi-Cal to all un­doc­u­mented adults as some law­mak­ers have pressed him to do.

On the cam­paign trail, New­som came out in sup­port of a sin­gle-payer sys­tem in which every­one re­ceives the same gov­ern­ment in­sur­ance. He says that’s still his goal, but he’s fo­cus­ing on smaller steps to­ward pro­vid­ing all Cal­i­for­ni­ans health in­sur­ance they can af­ford.

That plan re­mains in New­som’s up­dated bud­get pro­posal.

It in­cludes a fine for Cal­i­for­ni­ans who don’t carry in­sur­ance to re­place a sim­i­lar fed­eral pol­icy that the Trump ad­min­is­tra­tion ended in 2017. New­som says he’ll use the rev­enue from the penalty to make in­sur­ance more af­ford­able for peo­ple who strug­gle to pay for plans on Cov­ered Cal­i­for­nia, the state’s in­sur­ance mar­ket­place cre­ated un­der the Af­ford­able Care Act.

The ab­sence of an in­sur­ance man­date could lead 300,000 Cal­i­for­nia con­sumers to flee the in­di­vid­ual in­sur­ance market, in­clud­ing as many as 250,000 peo­ple in­sured through Cov­ered Cal­i­for­nia, ac­cord­ing to es­ti­mates by the Cal­i­for­nia As­so­ci­a­tion of Health Plans. Ex­perts say fewer peo­ple means a less-di­verse risk pool, which raises costs for every­one.

The pol­icy change is al­ready hav­ing an ef­fect — Cov­ered Cal­i­for­nia showed a 24% drop in the num­ber of new en­rollees from 2018 to 2019.

“With­out a man­date, you will see an in­crease in your pre­mi­ums — ev­ery sin­gle per­son in this room and every­body watch­ing,” New­som said. “I’d like to avoid that.”

In the Jan­uary bud­get, New­som pro­posed us­ing rev­enue from the man­date to cre­ate state sub­si­dies for peo­ple mak­ing 250% to 400% of the poverty level, or be­tween $30,000 and $49,000 a year. Now, he says peo­ple mak­ing as lit­tle as $24,000 will also re­ceive a boost. The state cred­its would be in ad­di­tion to fed­eral sub­si­dies.

His pro­posed ex­pan­sion also ex­tends as­sis­tance to peo­ple earn­ing up to $73,000 a year, or 600% of the fed­eral poverty level, who don’t cur­rently get fed­eral sub­si­dies. Cal­i­for­nia would be the first state to make this change, though Min­nesota had a tem­po­rary pro­gram to help this group in 2017, ac­cord­ing to Lau­rel Lu­cia, health care pro­gram di­rec­tor with the UC Berke­ley Labor Cen­ter.

Chris­ten Linke Young, a fel­low with the USCBrook­ings Scha­ef­fer Ini­tia­tive for Health Pol­icy in Wash­ing­ton, D.C., called it “an in­cred­i­bly ex­cit­ing piece of pol­icy” for im­prov­ing af­ford­abil­ity, though she noted it would be tough to ex­e­cute.

“It’s hard to put to­gether a tax credit that sits on top of the fed­eral tax credit in this way,” she said. “The sys­tem re­quires a high de­gree of op­er­a­tional ex­cel­lence from Cov­ered Cal­i­for­nia and the tax agency in Cal­i­for­nia. … It is op­er­a­tionally com­pli­cated, and it cer­tainly is some­thing pol­i­cy­mak­ers should have front of mind.”

An­thony Wright, ex­ec­u­tive di­rec­tor of the consumer group Health Ac­cess, said in a state­ment that rev­enue from the man­date could help Cal­i­for­nia’s low- and mid­dlein­come fam­i­lies who “are still liv­ing one emer­gency away from fi­nan­cial ruin,” but added that more is needed be­cause of the state’s high cost of liv­ing.

The new sub­si­dies would go into ef­fect for calendar year 2020, the first year the state penalty would be im­posed. But Keely Bosler, New­som’s di­rec­tor of fi­nance, says penalty rev­enues won’t come in un­til 2021, so gen­eral fund dol­lars will be used at first. The sub­si­dies would ex­pire in three years.

Wright’s “Care4All Cal­i­for­nia” coali­tion is push­ing a pack­age of 22 bills this year, in­clud­ing two that would cre­ate the in­di­vid­ual man­date and sev­eral oth­ers that would fur­ther sub­si­dize in­sur­ance costs.

The group also wants to see Medi-Cal, the state ver­sion of the fed­eral Med­i­caid pro­gram that pro­vides free or low-cost health in­sur­ance to those with lim­ited in­comes, ex­panded to all un­doc­u­mented adults in the state who qual­ify based on their in­comes.

But on Thurs­day, New­som re­it­er­ated that his plan would ex­tend Med­i­Cal el­i­gi­bil­ity only to un­doc­u­mented peo­ple up to age 26. Un­doc­u­mented chil­dren 18 and un­der are al­ready el­i­gi­ble.

In the Jan­uary bud­get pro­posal, New­som es­ti­mated that cov­er­ing the young adults would cost $260 mil­lion. This week’s ver­sion al­lo­cates just $98 mil­lion for this pur­pose.

The gov­er­nor says he orig­i­nally es­ti­mated that 138,000 peo­ple would ben­e­fit from the ex­pan­sion, but his lat­est es­ti­mate puts it closer to 106,000 peo­ple. The re­vised bud­get states that the ex­pan­sion will pro­vide full-scope cov­er­age to ap­prox­i­mately 90,000 un­doc­u­mented young adults in the first year, and that nearly 75% of these in­di­vid­u­als are cur­rently in the Medi-Cal sys­tem.

“It’s fully funded from our per­spec­tive, and we are fully com­mit­ted to im­ple­ment­ing it,” New­som said. “Those num­bers re­flect a dif­fer­ent re­al­ity. Rather than hav­ing a sur­plus, I’d rather be more hon­est go­ing into the bud­get.”

Some Repub­li­can law­mak­ers say New­som is over­spend­ing in his May re­vi­sion.

“In the last decade, Cal­i­for­nia’s state bud­get has more than dou­bled,” said Repub­li­can Assem­bly­man Vince Fong of Bak­ers­field. “Even with a bud­get sur­plus, the gov­er­nor has the au­dac­ity to pro­pose even more taxes in­stead of re­turn­ing it to hard-work­ing Cal­i­for­ni­ans [who] earned it. Cal­i­for­ni­ans are right­fully fed up with the in­sane cost of liv­ing and work­ing in this state.”

New­som in­sists that the in­di­vid­ual man­date is not a tax.

He says he’s not propos­ing a Med­i­caid ex­pan­sion to all un­doc­u­mented Cal­i­for­ni­ans due to the cost, which he es­ti­mates at $3.4 bil­lion.

“If you’re cu­ri­ous why I can’t in­clude it in the May re­vise, there’s 3.4 bil­lion rea­sons why it’s a chal­lenge,” he said.

But he noted that the Leg­is­la­ture “may have new strate­gies, new ap­proaches,” and that he’s will­ing to lis­ten.

This pro­posal is the lat­est in a years-long fight by uni­ver­sal health care ad­vo­cates in Cal­i­for­nia. Demo­cratic law­mak­ers re­quested $1 bil­lion last year to make these and other changes, but thenGov. Jerry Brown did not set aside money in the bud­get.

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