This week, California legislators announced two new bills to help more Californians struggling to afford health care coverage for themselves or their family. AB 2347 by Assemblymember Wood, Chair of the Assembly Health Committee and SB 65 by Senator Pan, Chair of the Senate Health Committee. These bills provide new investments to enhance federal and state subsides in Covered California and will continue to lower premiums and help many low-income Californians who still face barriers to care due to costs, particularly through copays and deductibles. While no additional Covered California affordability assistance has been included in Governor Newsom’s current 2020-2021 budget, these legislative bills would provide needed financial relief to many Californians who still find it difficult to afford their health care coverage in a high cost of living state like California.
Last year, California’s investments made Covered California more accessible and affordable to hundreds of thousands, stabilizing the market and keeping costs in check for everyone. Additional affordability assistance for consumers in Covered California will mean more people covered, more patients getting care they need, and all paying lower premiums than they would have otherwise. These new proposals expand on progress from last year and tackle one of the main cost concerns for Californians – out-of-pocket cost sharing – which often forces people to skip or delay care. In a high cost of living state, Californians need the additional assistance to afford health coverage and care, which helps make the whole system work better, and get us closer to universal coverage.
Last year, California took unprecedented action to provide additional affordability assistance to nearly one million Californians enrolled in Covered California health plans. These new state subsidies augmented existing federal premium subsidies for lower-income Covered California enrollees, along with first-in-the-nation premium assistance for middle-income consumers. It was announced earlier this week that these subsidy enhancements, along with the reinstatement of the individual mandate, helped to propel a 41% increase in new enrollments in Covered California. About 576,000 lower-income consumers, received an average of $608 per month in subsides, lowering the average household monthly premium from $881 per month to $272, a decrease of 70%. Another 15,000 middle-income Californians who were not previously eligible for subsides, received and average of $504 per month, lowering their premiums by nearly half.
While many Californians received help in last year’s budget, no state-funded premium subsidies went to individuals that make under $25,000 per year (which is the average salary for a minimum wage worker). Even with the new state premium assistance, many middle-income Californians are still paying as much as 18% of their income for coverage. What is also missing from previous proposal is any affordability assistance to help lower the barriers that many lower-income Californians fact when accessing care, particularly because of high deductibles, co-pays or other out-of-pocket costs. About four out of ten lower-income enrollees chose Bronze plans in Covered California with a $7,000 deductible. These plans come with just three doctor visits before having to meet their deductible. Anything over a doctor’s visit – and especially an emergency – would still come with a large out-of-pocket cost. Virtually no one living on $24,000 per year has $7,000 saved in the bank. AB 2347 (Wood) and SB 65 (Pan) would help fill some of these gaps, helping to expand coverage further, and make coverage more meaningful for those who have it.