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Mandated California?

State explores how to counteract end of Obamacare mandate‚ or risk a million more Californians without health insurance

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COVERED CALIFORNIA could lose 10 to 30 percent of its participants in the next year.
  • COVERED CALIFORNIA could lose 10 to 30 percent of its participants in the next year.

In a scramble to keep people enrolled in healthcare plans, what did New Jersey, Vermont and the District of Columbia do earlier this year that California has not done?

They began requiring that their residents carry health coverage or face a state penalty for going without it. Such "individual mandates" aim to replace the federal mandate—perhaps the most controversial but essential part of the Affordable Care Act, often called Obamacare—that sought to force people to sign up for health insurance or pay a tax penalty. The Republican Congress and the Trump administration have repealed that federal penalty, effective next year.

The clock is ticking. Obamacare has led to a record number of Californians having medical coverage. But a new study warns that if the state does nothing to counteract the Trump administration's moves to undermine Obamacare, up to 1 million more Californians could be without health insurance within the next five years.

What's kept California from enacting its own mandate?

Some state Democratic leaders are wary of enacting a state mandate without also making health insurance cheaper for Californians.

"Providing subsidies is a better reality for members of our community than providing penalties," says Assemblyman Joaquin Arambula, a Fresno Democrat who co-chaired the select committee on universal healthcare that conducted town halls across the state last summer. "It's the carrot versus the stick."

Sacramento State Sen. Richard Pan, a Democrat who chairs the Senate Health Committee, said the Legislature is focused on keeping the state's insurance market exchange, known as Covered California, strong. Some 2 million Californians buy health coverage through the exchange, which provides federal subsidies to low-income purchasers.

"We are going to do what we can in California to stabilize the insurance market, to do what we can to make health insurance, particularly on Covered California, affordable," says Pan, who has not yet endorsed any particular remedy. "We are up against a federal administration that is doing the opposite and forcing people to pay higher premiums.

"As we look at options, like do we want to do an individual mandate, we also need to recognize part of what is driving that is not only the removal of the federal mandate, but also actions taken to increase insurance premiums," Pan says.

Since the Affordable Care Act was implemented in 2013, the state's uninsured rate has dropped from 20 percent to 7 percent. Currently 3.4 million Californians are uninsured, undocumented immigrant adults making up the majority of that group.

But without more aggressive state intervention to counter Washington's retreat from the program, an estimated 500,000 to 800,000 more Californians under 65 will be uninsured by 2023, according to the new study from the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research.

A mandate and state subsidies are among options the Legislature will be exploring to combat the expected exodus from insurance. But both are controversial. An Economist/YouGov poll found that 66 percent of Americans oppose a mandate. And although a few other states such as Vermont and Massachusetts do offer state subsidies, in California state subsidies could cost up to an estimated $500 million, at a time when an incoming Democratic governor and Democratic supermajorities in the Legislature have promised pricey programs such as universal healthcare and universal preschool.

So far, Covered California enrollment, now underway through Jan. 15, is meeting projections—with a big caveat. As of the end of November, more than 90,000 newly insured people signed up, says Peter Lee, its executive director. But those projections already were lowered by 10 to 12 percent compared to last year because it was unknown what effect the removal of the penalty would have on sign-ups.

"There's no question that a penalty imposed on individuals for whom health insurance is affordable is a good policy," says Lee, who said he would follow whatever rules the Legislature adopts. "The penalty encourages people to participate in a system that, if they don't, we all bear the cost. And it encourages people to do the right thing for themselves."

Covered California is working on a report commissioned by the Legislature on how to best bolster the system. It's due in February, and Lee says a variety of options are on the table including a mandate, expanding subsidies and using state money to lower premiums, a process called reinsurance.

Some of those ideas echo the recommendations UC researchers offered in their study: incorporate a state mandate with penalty funds going to toward making insurance more affordable, state-funded subsidies in addition to the existing federal subsidies, and a Medi-Cal expansion to include low-income undocumented immigrants.

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