While President Trump and Republicans continue their assault on the Affordable Care Act and the 21 Democratic candidates for president talk about their health care proposals, Gov. Gavin Newsom and the state Legislature are working to reduce the number of uninsured Californians — without raising taxes.
The two-prong approach provides a model for how states can get closer to universal coverage despite the complexities of the current health care system.
It’s important to remember that before the major provisions of the ACA went into effect in 2014, 22 percent of Californians were uninsured. That number has dropped today to under 10 percent, or about 3 million people.
Despite the progress, California still is far from offering world-class coverage to residents. According to a Commonwealth Fund report, the United States ranks last among 11 major industrialized countries on measures of health system quality, efficiency, access to care, equity and healthy lives. This despite the fact that we spend about $10,000 per person annually on health care, nearly double the other countries.
The first part of Newsom’s plan is the most controversial. He seeks to restore the individual mandate requiring that Californians buy health insurance or face a penalty. The individual mandate was an important piece of the Affordable Care Act, but it was repealed by Trump and congressional Republicans in the process of implementing their tax reforms. Restoring the individual mandate in California would raise an estimated $500 million, enough to extend Medi-Cal coverage to undocumented Californians age 19-26. The state already provides coverage for undocumented children.
Some argue that California shouldn’t spend money to insure those who aren’t here legally. But the law requires that the undocumented receive treatment when they land in hospital emergency rooms. Providing routine, preventive checkups is cheaper than emergency room visits.
The second piece of the governor’s proposal is designed to help low- and middle-class families struggling to buy insurance on the Covered California exchange. It’s a significant problem in the Bay Area, a region where the high cost of housing puts enormous financial pressures on residents.
California now offers subsidies to families earning up to four times the federal poverty level. That’s an income of $65,840 for a family of two and $100,400 for a family of four. The governor’s plan would make California the first state in the nation to offer tax credits for families earning between four times and six times the federal poverty level. The proposal would also put limits on how much lower-income residents would have to pay for premiums.
The state would fund the subsidies by renewing the managed care organization tax on hospitals, which is scheduled to expire at the end of this year. The tax raises about $1.5 billion annually for Medi-Cal programs, including children’s health care. The renewal requires federal approval. Hospitals agreed to the tax in large part because they are able to recover the funds from federal health care programs.
Newsom promised during his campaign that he would take steps to reduce the number of uninsured Californians. The Legislature has bills to move the governor’s plan forward. Working together, they can make significant progress on health care.
Editorial: California should pounce on opportunity to lead on health care