Following the release of 2019 enrollment numbers earlier this week that show steady overall enrollment but a 23% drop in new sign-ups, Covered California today put out a new report detailing various options for increasing affordability assistance for low- and moderate-income Californians who buy health insurance as individuals. The report, commissioned by the Legislature in last year’s AB 1810, offers several proposals for how the state could structure enhanced subsidies so more Californians can better afford and sign up for health coverage.
The report modeled the potential impacts of using state dollars to supplement existing Affordable Care Act subsidies. A number of options are considered from reducing deductibles and cost-sharing for low-income Californians to providing new subsidies to Californians above 400% of the poverty level, the income level where ACA subsidies currently run out. The report projects that without the individual mandate, about half of those in the individual market will be uninsured but with the most expansive steps modeled, over 70% would be insured with more affordable premiums as well as lower copays and deductibles.
In a high cost-of-living state, these recommendations are not just welcome but urgent. Providing additional affordability help to low and moderate income Californians will allow them to better afford and enroll for health coverage, which benefits families and our health system as a whole. While the Affordable Care Act provides hundreds or even thousands of dollars of financial subsidies to over a million people trying to afford insurance in Covered California, for some a little more help can go a long way to get them covered. The drop in new Covered California enrollments is a clarion call for Governor Newsom’s health proposals that would help more Californians afford coverage, and suggests we should go further in providing more affordability assistance.
Californian families continue to need help whether they are just past the cut-off for any help for an individual at around $48,000 a year, or they are at lower income levels and see steep jumps in deductibles, from $75 to $650 to $2,200 and more. Californians at lower incomes now get some subsidies, but it may be a 8-foot rope for someone in a ten-foot hole. Just a bit more help could make a huge difference.
We want more people covered, getting the primary and preventive care they need, and also sharing the risk and cost of care so as to keep premiums lower across the board. These greater subsidies are a key part of a package not just to prevent increases in the uninsured rate due to federal attacks on our health system, but to get us closer to a more universal and affordable health system in California.
The report also models the impact of reinstating the penalty for not having coverage, confirming what other studies have found that restoring the penalty will reduce premiums as well as the number of uninsured. The report also looks at reinstating one of the initial provisions of the Affordable Care Act regarding reinsurance in California, which would also have the effect of lowering premiums, encouraging consumers to buy coverage with lower copays, and further reducing the number of uninsured.
Increasing affordability assistance through the options outlined in the new Covered California report, would be part of a range of actions taken by the state to shield consumers from federal attacks on the ACA. As various attacks were made to our health system, California has responded in a number of ways including adopted longer open enrollment periods, broad marketing efforts, increased consumer protections, and more. Additional steps to encourage health care coverage such as increasing subsides for those that still find insurance unaffordable, and reinstating the penalty for not having health coverage, could further protect health consumers, and move the state closer to a more universal health care system.
Today’s report highlights the urgency of enhancing subsides, as people are struggling to afford their care now. The Care4All California campaign of over 60 health and consumer groups will advocate for immediate budget investments that help low-and middle-income Californians purchase health care for themselves and their families. Last year, the coalition supported the Assembly’s budget proposal that included a one billion dollar “down payment” to universal coverage, which included a half-billion dollars in general fund investment in for increased affordability assistance. Governor Newsom’s current proposal to add affordability help in Covered California is entirely funded by the revenue from a state individual mandate, but the #Care4AllCA coalition will again seek a general fund investment, so that several of the options in this report can be funded, and more Californians helped as soon as possible.
People want coverage—their main concern is whether they can afford it, and these recommendations would go a long way to help. Revenue raised from a coverage penalty should go to greater affordability assistance, but the mandate should not be the only source of funding,” said Wright. “Ideally, nobody is impacted by the individual mandate because coverage is affordable enough that everyone signs up. Californians have lived with the mandate for the past five years, what will be the most impactful will be the new and enhanced subsidies.
The Legislature should take up the options outlined in this report in order to improve affordability for California families up and down the income scale. Californians should get to a guarantee that no family has to spend more than a percent of their income to get quality coverage and to make copays and deductibles more affordable. To provide the greatest good to the most Californians, the Legislature should go beyond the Governor’s proposal, and make a general fund investment similar to what was proposed last year.