More Californians got health insurance annually over 4 years. Here’s why the rate stalled

Sep. 12--California has seen its rate of uninsured residents drop every year since the state's affordable care marketplace, Covered California, began offering insurance policies, but 2018 was the exception.

The rate stalled last year at 7.2 percent, according to new data from the U.S. Census Bureau, despite the fact that taxpayers were still subject to the individual mandate penalty on their tax returns. Nationally, the rate of uninsured rose to 8.5 percent from 7.9 percent.

The uninsured rate in California looks high when compared with states such as Massachusetts and Vermont that boast the nation's lowest uninsured rates at 2.8 percent and 4 percent, but quite low when compared with 17.7 percent in Texas and 14.2 percent in Oklahoma.

The leader of California's state-based insurance marketplace said the Golden State isn't as far behind Massachusetts and Vermont as these numbers look. Peter V. Lee said roughly 60 percent of uninsured Californians are immigrants who do not qualify for the federal subsidies offered by Covered California because they are undocumented.

Currently, Lee said, about 3 percent of eligible Californians are uninsured, but Gov. Gavin Newsom and the state Legislature passed new laws this year that offer these people greater incentives to sign up for coverage in 2020.

"We have more individuals that, under the Affordable Care Act, aren't eligible for Medicaid or federal subsidies," Lee said, "so the fact that we stayed constant (on the uninsured rate) is not bad news. We always want to do more, and I think we've seen Gov. Newsom and the Legislature saying, 'We don't want to just protect the Affordable Care Act. We want to build on it and go beyond it.' "

The Patient Protection and Affordable Care Act of 2010 gave U.S. residents a number of health insurance protections. It provided that people with pre-existing conditions could not be refused coverage, and it allowed parents to keep their dependent children on their coverage until age 26. It also spelled out subsidies to assist people who could not otherwise afford health insurance.

Under the ACA, often referred to as Obamacare, California has seen bigger drops in uninsured residents than any other state, Lee said, from 17.2 percent in 2013 to 7.2 percent today.

People who have received subsidies have pretty much maintained their health insurance coverage over the last two years, Lee said, referring to an August 2019 report from the Centers for Medicare and Medicaid Services that looked at the individual health insurance market from 2016-2018.

"People who got help stayed in, "Lee said. "What we saw nationally was a very dramatic drop in people with coverage that did not get subsidized. In the period from 2016 to 2018, there was a decrease of 2.3 million people dropping out of coverage that did not get subsidies. That was a 44 percent decline."

The Trump administration not only put less funding into advertising ACA insurance plans but also refused to reimburse insurers for discounts they were required to offer on deductibles and co-payments. Insurers ended up steeply increasing insurance rates to account for that, and many consumers opted out of insurance because of the prices.

The California market, however, saw greater stability than the nation as a whole because Covered California worked closely with insurers to cover costs and sunk millions of dollars into promoting the benefits of being insured.

"We had a drop of about 17 percent, or 170,000 people, but if the rest of the nation had dropped at only the rate California did, there would be 1.5 million more unsubsidized Americans having insurance in 2018 than there were," Lee said.

Looking back at enrollment this year, Lee said he wouldn't be surprised to see a census report next year showing that California saw an uptick in the rate of uninsured. 2019 is the year Washington pulled back on the individual mandate, a tax penalty U.S. citizens paid if they didn't maintain insurance.

The good news, Lee said, is that the governor and Legislature have turned on a dime to react to that policy shift, so the state should see gains in the number of insured residents in 2020.

Over at the California Budget Project, research director Scott Graves said he also sees the new measures as key to ensuring that reductions in California's uninsured rate resume.

"These policies include state subsidies to lower the cost of health insurance purchased in the individual marketplace and a requirement for Californians to have health coverage or pay a state penalty," Graves stated.

Uninsured Californians end up costing all of us more money, Lee said, because they are showing up in the emergency room and not paying their bills, and when that happens, those costs show up as increased expenses for people with insurance. Also, Lee said, if people are not getting the preventive care they need, it will mean higher-cost services down the road.

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