Fewer Californians will be insured next year, and those who are could feel the impact

March 01--Almost 20 percent of people with health insurance on the independent market in California will drop coverage next year because they won't face a tax penalty, a survey predicted.

The study by Harvard Medical School researchers suggested that 378,000 fewer consumers in California will have insurance in 2019 when the Internal Revenue Service will no longer assess a tax penalty on the uninsured.

The random survey of 3,010 adults was conducted in California last year to measure the impact of the federal tax reform law that does away with the Affordable Care Act's individual mandate. The survey results were reported Thursday in an online blog of the journal Health Affairs.

The study found that 18 percent of respondents with individual market coverage said that, without the threat of a tax penalty, they would have gone without insurance.

Those with the least amount of health care spending were more likely to say they would go without coverage, though the majority of enrollees spending little time at the doctors office said they would still purchase insurance without the mandate.

People insured through the individual market don't have employer-sponsored health benefits. They include the 1.3 million with coverage through the Covered California health exchange and other folks who buy insurance "off the exchange" through a broker or directly from an insurance carrier.

In a statement, Covered California Executive Director Peter Lee said the effect of losing the individual mandate is significant. "While California would continue to have a stable individual market, and we have the reserves and flexibility to adjust for this impact, the impacts would be real and significant for California's consumers," Lee said. "Californians would be paying increased premiums, and some of those who go without insurance could face big medical bills when unforeseen health events occur."

California is likely to have a less healthy pool of consumers in the individual market, a primary reason why insurance premiums could increase by 12 to 16 percent in 2019, Lee stated. The vast majority of Covered California's customers have premium assistance to protect them against rate increases, but individuals and families not eligible for subsidies would be affected by the double-digit premium increases.

The Harvard Medical School study found that four out of five people in the state's individual market will keep their coverage. Covered California believes it can build on the customer base with aggressive marketing focused on enrollment.

Between 60,000 to 70,000 residents have been covered by health plans on the Covered California exchange in a five-county pricing region that includes Stanislaus, San Joaquin, Merced, Mariposa and Tulare counties.

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