The Affordable Care Act has changed the insurance landscape in California.
PALM SPRINGS, Calif. – Lawmakers in California have introduced bills that would reinstate the individual mandate, requiring all state residents to have health insurance starting in 2020 or pay a tax penalty.
Identical bills introduced in the state Senate and Assembly are an attempt to reverse the revocation by Congress of the federal mandate that was part of the Affordable Care Act.
Opponents of the mandate, including President Donald Trump, argued it was not fair to penalize someone for not having insurance. Supporters of the California bills say the insurance market will fall apart without the mandate.
“I don’t see a very rosy picture of what is happening now that the (federal) mandate is gone,” said Bill Youngblood of William Youngblood Insurance Agency in Rancho Mirage. “The pricing of insurance will increase without a mandate. You need everyone paying into the system to keep insurance premiums down. Insurance premiums paid without the mandate will not be enough to make a healthy insurance system for California or even the country.”
Since the Affordable Care Act, also known as Obamacare, was implemented in 2013, the state’s uninsured rate has dropped from 20 percent to 7 percent. A new study estimates that without a mandate, up to 800,000 more Californians under age of 65 will be uninsured by 2023, according to the University of California Berkeley Center for Labor Research and the UCLA Center for Health Policy Research.
If everyone in California – both healthy and sick people – are paying into the pool of health insurance premiums, then it increases the available funds to cover medical procedures. The more people paying insurance premiums, the less each person must pay. If only people who are sick are paying into the pool of health insurance premiums, then there is less money to cover those same medical procedures, meaning those select people will have to pay higher premiums.
“We need young people to pay into the health insurance system, even though they think they will live forever and nothing will ever be wrong with their health,” Youngblood said. “By everyone paying into the system, it helps keep insurance prices stable and more affordable for everyone.”
Without the mandate, Youngblood said, insurance premiums will increase exponentially.
But Ken Wheat, Eisenhower Health chief financial officer, said he doesn’t expect to see a significant impact from the loss of the federal mandate.
“It is likely that the people who choose to pay the penalty have not opted in to Covered California previously and have not had insurance,” Wheat said, referring to the state’s official health care marketplace. “There may be some fluctuation in the number of uninsured patients in the emergency department, but overall impact is not expected to be substantial.”
Jan Emerson, California Hospital Association spokeswoman, said the association is in support of both bills because it keeps those patients out of the emergency room.
“If people don’t have coverage, then they wait until they are very sick to seek medical care and end up in the emergency room, which is the most expensive place to get medical care,” Emerson said. “It’s better for people and for the health care system if everyone gets routine medical care.”
Emerson said Covered California has already seen a drop in coverage since the federal mandate was revoked.
Covered California saw new enrollment for health insurance drop about 24 percent this year, which the agency attributes to the removal of the federal mandate.
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