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California May Expand Access to Health Coverage Premium Help

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The California Senate is looking at a bill that could give more people financial help with paying for Affordable Care Act public exchange plan coverage, and a related bill that could create a state coverage ownership mandate.

California lawmakers have been working on efforts to defend the state’s state-based ACA public exchange, Covered California, against eroding federal support since the 2016 general elections.

(Related: New Calif. Governor Proposes Middle-Income Health Premium Subsidy)

Now, they are considering Senate Bill 65 — the subsidy bill — and Senate Bill 175 — the mandate bill. Both bills were introduced by state Sen. Richard Pan, D-Sacramento, California.

(Related: California: Medicaid Cheaper, More Stable Than CHIP)

SB-65: The Subsidy Bill

SB-65 could provide California residents with financial assistance to buy individual health insurance through Covered California.

SB-65 would provide state-funded coverage purchase subsidies for California residents with household incomes below 600% of the federal poverty level. In California, 600% of the federal poverty level is $72,840 for an individual and $150,600 for a family of four.

Members of the state Senate Health Committee voted 8-0 to approve SB-65 April 10, and members of the state Senate Appropriations Committees voted 6-0 to approve the bill April 29.

SB-175: The Proposed State Coverage Mandate

SB-175 would change California insurance and tax laws to impose a state individual health insurance mandate.

SB-175 would require most California residents to maintain a minimum level of health coverage for themselves and their dependents or else pay a tax penalty.

The bill would provide exemptions for state residents facing financial hardships, and for residents who failed to buy coverage because of their religious beliefs.

SB-175 would take effect only if SB-65 also took effect.

If SB-65 became law, the new SB-175 coverage mandate rules would apply starting Jan. 1, 2020.

The base tax penalty for individuals not exempted from the mandate would be $695 per year.

Members of the Health Committee approved SB-175 by a 6-1 vote April 10, and members of the state Senate Government and Finance Committee approved SB-175 by a 4-2 vote April 24.

Members of the state Appropriations Committee plan to consider SB-175 May 13.

What the Bill Analysts Are Saying

Analysts at the California Legislature’s Legislative Analyst’s Office (LAO) are predicting that SB-65 could add $891 million in new annual state subsidy spending and produce $482 million in new annual mandate penalty revenue.

The analysts state that SB 175 stems from concerns about the current cost and efficiency of the state’s health care system.

The federal Tax Cuts and Jobs Act of 2017 set the penalty for violating the Affordable Care Act individual coverage ownership mandate at zero beginning this year.

“The requirement that most individuals have coverage technically remains in effect, but without the penalty this requirement is unenforceable,” LAO analysts write.

About 3.5 million Californians were uninsured in 2017, and 2.2 million bought individual major medical coverage, the analysts write.

The elimination of the federal individual mandate penalty could increase the number of uninsured Californians and increase the cost of individual major medical insurance, the analysts predict.


Information about SB-65 is available here.

Information about SB-175 is available here.

The LAO’s analysis of the bill is available here.

— Read Republicans Hazy on What Would Come After the Death of the ACA, on ThinkAdvisor.

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