California Lawmakers Consider Ways to Close Coverage Gaps

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: Eduardo and Maria Contreras sit in the living room of their mobile home in San Juan Capistrano on Wednesday, March 20, 2019. The two make too much money for Medi-Cal, but what they earn is still not enough to purchase Covered California health plans because they don't qualify for subsidies under the Affordable Care Act. (Photo by Mark Rightmire, Orange County Register/SCNG)
Eduardo and Maria Contreras of San Juan Capistrano make too much money to qualify for Medi-Cal but not enough to afford unsubsidized Covered California health plans. Photo: Mark Rightmire, Orange County Register/SCNG.

Orange County residents Eduardo and Maria Contreras have worked hard to make ends meet. For a long time, they juggled rent, car payments, and the cost of raising two teenage sons — including college for the older one — while making about $50,000 a year. In 2019, thanks to Eduardo’s new job as a cook, they expect to make more than $80,000. But even with higher income, Eduardo told the Uncovered California news collaborative, “It feels like I’m caught in a vicious cycle.”Essential Coverage

That’s because Maria, who works as a hotel housekeeper, has been ill. Though she hasn’t had health insurance before (neither she nor her husband has employer-sponsored insurance), coverage is now a necessity to pay for her care. The couple make too much to qualify for Medi-Cal, so they bought a health plan through Covered California, which charges a monthly premium of $1,045 (their two sons are covered separately through Medi-Cal). Despite Eduardo’s higher salary, they’re struggling to make the payments because they earn too much to qualify for subsidies under the Affordable Care Act (ACA).

For years, the California State Legislature has pursued the goal of covering all Californians, and Governor Gavin Newsom has embraced that goal with a comprehensive package of health care proposals. Under the ACA, California’s insured rate has risen to 93%, but millions of Californians continue to go without coverage. The barriers to coverage include making too much to qualify for federal ACA premium subsidies, like the Contreras family, and being ineligible for Medi-Cal and coverage through Covered California because of immigration status. (Learn more about the barriers to coverage in this video, available in English and Spanish.)

The number of Californians without insurance could increase, according to a study by the UC Berkeley Labor Center and UCLA Center for Health Policy Research. The researchers project that, due to the federal government zeroing out the individual mandate penalty, 490,000 to 790,000 more Californians are likely to be uninsured in 2023 if the state does not take action. To maintain the coverage gains made by the ACA and reduce the remaining coverage gaps, the researchers note the state could take steps to “expand Medi-Cal to all low-income residents regardless of immigration status, provide state subsidies to improve affordability of individual market premiums and out-of-pocket costs, implement a state individual mandate, and continue to support and strengthen outreach and enrollment efforts, among other strategies.”

Legislation on the Table

This work is already underway. As Sammy Caiola reports for Capital Public Radio, the legislature is considering “21 bills that aim to either lower the cost of care, or get more people into the insurance market.” Many align with Governor Newsom’s proposals, and some go further. Here’s a look at some of those bills:

  • AB 174, introduced by Assemblymember Jim Wood, and SB 65, introduced by State Senator Richard Pan, would make health coverage purchased on the individual market more affordable for Californians. Together the bills would provide new financial support for people like the Contreras, who earn too much for ACA subsidies but still struggle with insurance costs, and would also help lower-income Californians with out-of-pocket costs.
  • SB 175, introduced by Pan, and AB 414, introduced by Assemblymember Rob Bonta, would establish a state-based individual mandate penalty to encourage enrollment in coverage. It would replace the federal penalty that was eliminated. The governor proposes paying for the additional Covered California subsidies with funds generated from the state-level penalty. However, some legislators and the Legislative Analyst’s Office suggest that the state may want to provide additional funding.
  • AB 4, authored by Bonta and Assemblymembers David Chiu and Miguel Santiago, and SB 29, authored by State Senator Maria Elena Durazo, would expand full Medi-Cal benefits to all low-income Californians regardless of immigration status. POLITICO’s Angela Hart reports in another article (subscription required) that while the bills have no formal opposition, Newsom “has cited the steep cost for not proposing to cover all eligible undocumented adults in his first budget proposal. His initial plan would expand access for those age 19 to 26.” California already covers low-income undocumented immigrant children up to age 19 through Medi-Cal.

Which legislation are you tracking? Tweet at me with #EssentialCoverage or email me.

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