#CABudget Votes This Week Include Major Health Investments and Expansions

This week, the Assembly and Senate are poised to pass key health expansions as part of the overall 2019-20 Budget. The votes taken today and this week will advance health care reforms that were negotiated by the Governor and legislative leaders. Governor Newsom has until July 1 to sign the budget, which will make official the provision of new financial help to around one million Californians, starting in 2020, a major expansion of coverage for hundreds of thousands of Californians. Here are comments describing the practical impacts of these investments for California consumers:

This year’s state budget provides new help to hundreds of thousands of Californians to better access and afford health coverage in our high cost of living state. The budget expands and improves Medi-Cal, increases affordability assistance in Covered California, and otherwise makes investments and reforms to lower the cost and increase the quality of care for Californians. The new budget investments in health will help a million low- and middle-income Californians—from some of our poorest to those who make too much to currently get any assistance. As many as 300,000 California small business owners, seniors, young adults, immigrants, and many others will get enough help that they may become newly covered as a result. This budget’s first-in-the-nation reforms on health care together form a ‘down payment’ toward universal coverage in California. There’s much more to do, but these are significant steps to an improved health system.

ADDITIONAL AFFORDABILITY ASSISTANCE IN COVERED CALIFORNIA: The biggest investment in health care is more help to middle-income Californians who buy coverage as individuals. The budget includes $1.5 billion dollars over three years in state subsidies to help low- and moderate-income Californians better afford coverage. With this new assistance, many more Californians will have the guarantee that they don’t have to spend more than a certain percent of their income to get comprehensive coverage. The new dollars help resolve the cliffs in coverage subsidies in the ACA, which cut off for those over four times the poverty level. In our high-cost state, many people over that subsidy cliff were still facing significant challenges to afford care. The new affordability assistance now extends to six times the poverty level—around $75,000 for an individual, and $150,000 for a family of four, helping hundreds of thousands of Californians either gain coverage or better afford it.

  • Estimated 235,000 Californians who currently get no help to afford coverage because they make a little too much will get new help starting in 2020.
  • Almost 670,000 Californians between two and four times the poverty level will get some additional help, beyond what the ACA provides, to lower their premium even further.
  • Another 20,000 Californians at or below the poverty line will get their premiums reduced to nearly zero. These Californians fall through the cracks of Medi-Cal but will now get coverage aligned with Medi-Cal’s premiums.

More detailed in a new Health Access fact sheet on affordability assistance in the 2019-2020 state budget.

CONTINUING THE ACA’S INDIVIDUAL MANDATE TO KEEP CALIFORNIANS COVERED AND PREMIUMS LOWER: As part of this broader package to improve health coverage affordability, the budget continues the ACA’s individual mandate, but at the state level. The mandate helps keep individual Californians covered, while also helping stabilize the entire health care system. More Californians covered means more people sharing the risk, helping to prevent premium increases, and funding more affordability assistance. Last year, nearly half of the 8% average premium increase in Covered California was due to the federal attack on the ACA by zeroing-out the individual mandate penalty. When New Jersey reinstated the mandate in their state, premiums reduced by 9%. All of the money raised from the mandate goes to fund greater affordability assistance in Covered California, which is then supplemented by additional investments from the state budget. The additional affordability assistance, coupled by the mandate, helps to ensure that more Californians are covered and our health system is stronger for everyone.

EXPANDING MEDI-CAL TO THE PREVIOUSLY EXCLUDED: The budget expands not just Covered California but also Medi-Cal coverage to low-income seniors, income eligible young adults regardless of immigration status, and other populations currently excluded from coverage that similarly situated Californians are offered. The budget ends the so-called ‘senior penalty’ for low-income seniors that make too much for full-scope Medi-Cal, even as they are under 138% of the poverty level.

A KEY STEP TO #HEALTH4All: As part of this broader expansion of access and affordability, Medi-Cal will be expanded to include all income-eligible young adults regardless of immigration status. Beyond being one of a handful of states that covers undocumented children and pregnant women, California will be the first to remove this exclusion based on immigrant status for a broader group of adults. Providing primary and preventive care, not just expensive emergency services, helps not just the individual and their family, but the health and economic vitality of the community and our health system as a whole. This expansion is an investment in young adults who can start their lives and career covered and healthy and in the best position to make their contribution to California. Immigrants are an incredibly important part of our society and economy, and should be fully included in our health system as well, and California should take additional steps in the near future to ensure coverage of all Californians.

IMPROVING MEDI-CAL OVERALL: The budget improves Medi-Cal by restoring benefits, improving reimbursements to providers, and encouraging better quality. The budget restores key benefits cut in the Great Recession—restorations that have now taken a decade to reinstate. These benefits—optical, audiology, speech therapy, podiatry—are services that cost relatively little but will have a big impact for the patients that need them. From tobacco tax revenues, the budget includes supplemental payments to providers to increase access and improve value. We will continue to work to ensure that the public’s money is being used wisely to improve the health system for everyone.

OVERALL: These state budget investments help increase access and improve affordability for millions of Californians. While this budget does not include all that is needed, hundreds of thousands of Californians will be newly covered, and many more will get much needed help. As Washington DC debates repeals and rollbacks, we are gratified that the discussion here in California is about how much more help we can provide. California should continue to make additional progress in the years ahead, by continuing to improve affordability in Covered California, and remove remaining exclusions in Medi-Cal based on age, disability, and immigration status. This budget is a ‘down payment’ that moves California closer than ever to our goal of universal health care coverage.

All of these items were sought by the #Care4AllCA campaign of over 70 consumer and community groups and are detailed here in our Health Access Budget Scorecard.

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