Kaiser Health News
California Governor and Democratic Lawmakers at Odds Over Billions in Health Care Funds
by Angela Hart
Tue, 30 May 2023 09:00:00 +0000
SACRAMENTO, Calif. — When Gov. Gavin Newsom took office four years ago, the Democrat went after Republicans on the national stage as they sought to gut the Affordable Care Act. Key to his ambitious health care agenda: reinstating the fine on Californians who don’t have health coverage, which had been eliminated at the federal level.
It was a tough sell for a new governor, and Newsom needed strong allies among state Democratic leaders, who at the time, in 2019, voiced concern about essentially levying a new tax on Californians unable to afford the rising cost of health care. Democrats, who, then as now, controlled the state legislature, ultimately backed Newsom in exchange for a promise: The state would levy the fine but use that money to provide financial assistance to offset out-of-pocket costs for Californians purchasing health insurance on the state exchange, Covered California.
But Newsom, now in his second term, has since backed off that promise. His administration is holding on to revenue raised from the so-called individual mandate — the requirement that people have health coverage or pay a fine. And his proposed budget for the upcoming fiscal year beginning July 1, which is being debated in the state legislature, funnels the money to the state’s general fund.
That is infuriating fellow Democrats who accuse him of breaking a promise and disregarding the millions of Californians who can’t afford their deductibles and copays.
California began fining the uninsured in 2020, raising an estimated $1.1 billion over the first three years — and the Newsom administration projects it will bring in more than $700 million more over the next two years, bringing the projected five-year total to $1.8 billion, according to the state Department of Finance. Democratic leaders said Newsom’s tactic of holding back the money for the general fund is a “rip-off.”
“Money from the mandate should stay in health care,” Senate President Pro Tem Toni Atkins told KFF Health News, arguing the state should be distributing money now to help people afford health coverage. “I don’t know what we’re waiting for. We’ve got to figure out a way to make health care more accessible, and there’s no question that the cost of health insurance is a barrier.”
Democratic lawmakers are expected to continue ratcheting up pressure on Newsom in hopes of reaching a deal by their June 15 deadline to pass a budget bill. “We’ve always felt that the money is meant to bring insurance costs down,” said Democratic Assembly member Phil Ting, chair of the Budget Committee.
Newsom in 2019 stumped for the individual mandate amid concerns over rising insurance premiums, vowing to reduce Covered California consumer health care costs while setting himself apart from then-President Donald Trump, who was attacking the insurance mandate as unfair. Congressional Republicans had gutted the federal penalty — part of the Affordable Care Act — in 2017. Newsom argued it would still work in California to lower health care costs, and to help him achieve his goal of universal health care — the centerpiece of his ambitious health care agenda.
Newsom now argues that federal health insurance subsidies that offset the cost of monthly premiums are sufficient. And, in the face of a projected $32 billion state budget deficit, Newsom says California cannot afford to spend the money and further reduce out-of-pocket costs. He argues spending the money to slash deductibles, for instance, “would be “unsustainable.” His proposed budget would instead keep the money for the state’s general fund, to be used for anything California wants to spend it on.
But health care advocates who lobbied in favor of the fine, as well as many Democratic lawmakers, say the funds could be lifesaving and should be distributed now.
“The individual mandate was not intended to create funds for other government programs outside of health care,” said Democratic Assembly member Jim Wood, of Santa Rosa, chair of the Assembly Health Committee, at a heated budget hearing this spring. “The clear intent of the legislature was that this money was meant to go to affordability.”
Wood said he might have rejected Newsom’s plan if he had known the revenue it generated would be deposited directly into the general fund. “I don’t think I would have supported it,” he said. “It just feels like a violation of what we thought we were doing.”
Soaring out-of-pocket health care costs, for insurance premiums and deductibles for instance, are leading people to forgo health care. In California, a staggering 52% of residents report having skipped or delayed treatment in the past year for financial reasons, according to a recent survey by the nonprofit California Health Care Foundation. (KFF Health News publishes California Healthline, which is an editorially independent service of the California Health Care Foundation.)
Diana Douglas, a lobbyist with Health Access California, which was part of the coalition that backed the state’s coverage mandate in 2019, said Newsom must recognize soaring costs and spend the money now on affordability assistance. “This penalty money should be used to help Californians afford coverage and care.”
Health insurance plans offered by Covered California are continuing to get more expensive. Deductibles for a midtier insurance plan, for example, will jump to $5,400 next year, according to Covered California, up from $4,750 this year and just $3,700 two years ago.
And even many Californians who are purchasing coverage are putting off treatment in the face of high costs. A survey by Covered California in 2022 found that 48% of its consumers delayed important medical care due to cost.
Newsom this spring dodged a question by KFF Health News about the criticism he is facing over his push to retain the mandate money, saying simply he’s “proud” to have established the state coverage mandate and noting that federal premium subsidies are available for Californians purchasing coverage via Covered California. His administration defended the push to funnel money into the general fund, saying revenues would be repaid to a special health fund and be available to use on health care eventually, if the federal government cuts back existing premium subsidies. Administration officials argue that Newsom is essentially borrowing the money and say it’ll be repaid later — though lawmakers have expressed concern that he’ll never make good on that promise.
Critics and some Democratic lawmakers say holding back the money is a double whammy for low- and middle-income residents who are struggling to pay for coverage, and argue that it amounts to a tax on the poor. “It feels like we’re trying to save it on the backs of our low-income communities,” said Democratic state Sen. Caroline Menjivar, who represents the state’s San Fernando Valley.
Democratic lawmakers this year are backing an alternative proposal, championed by Health Access California, to spend revenue from fining uninsured residents on increasing health insurance subsidies for low- and middle-income people. They would be making good on a deal advocates secured with state Democratic lawmakers last year to reduce or eliminate out-of-pocket costs in Covered California and scrap deductibles entirely for a mid-tier plan.
“We need to make sure people not only have health coverage, but that they can also afford to actually use it,” said Ronald Coleman Baeza, a health care lobbyist with the California Pan-Ethnic Health Network.
Although Newsom and his Democratic allies have passed major expansions in coverage, the state does not have universal health care. Experts say more than 2.5 million Californians remain uninsured, including unauthorized immigrants who earn too much to qualify for Medi-Cal, and lawmakers are growing increasingly agitated that not all residents who are insured can afford to use their coverage.
“There was a clear commitment that these dollars were going to be used to bring down heath care costs, and we haven’t done it,” said Assembly member Pilar Schiavo, a Democrat representing the Santa Clarita Valley, who introduced a bill that would require any revenue raised from the individual mandate be permanently set aside for health care. Though it died this year, it can be revived next year, and advocates say they will continue pressing Newsom to distribute the existing money to Covered California consumers.
“We need to keep our promises,” Schiavo said. “If you have insurance that you can’t afford to use, or you’re afraid to go see the doctor because of how high that bill might be, then you don’t truly have access or universal coverage.”
This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
By: Angela Hart
Title: California Governor and Democratic Lawmakers at Odds Over Billions in Health Care Funds
Sourced From: kffhealthnews.org/news/article/newsom-democratic-lawmakers-health-care-funds-individual-mandate/
Published Date: Tue, 30 May 2023 09:00:00 +0000
Kaiser Health News
Medicaid Expansion Debate Will Affect Other Health Policy Issues Before Montana Legislature
SUMMARY: Montana’s Medicaid expansion program, which provides healthcare for over 75,000 low-income residents at a cost of about $1 billion annually, faces a pivotal debate in the 2025 legislature due to a 2019 bill’s end date of June 30, 2025. Legislative leaders expect discussions on renewal will intertwine with other health policies, like behavioral health funding and hospital regulations. Governor Gianforte supports continued funding but insists on work requirements. While Republicans express skepticism about Medicaid’s costs, Democrats advocate for its permanence. Additionally, abortion regulations are anticipated despite a recent constitutional vote affirming abortion rights in Montana.
The post Medicaid Expansion Debate Will Affect Other Health Policy Issues Before Montana Legislature appeared first on kffhealthnews.org
Kaiser Health News
Health Care Is Newsom’s Biggest Unfinished Project. Trump Complicates That Task.
SUMMARY: California Governor Gavin Newsom has made significant strides in health care accessibility, directing billions to safety net services and extending Medi-Cal benefits to over a million undocumented residents. However, rising costs, worsening homelessness, and ongoing health care access challenges remain. With the potential shift in federal policy under Donald Trump’s return to the presidency, California faces funding cuts, risking reductions in coverage and benefits. Notable initiatives like the expansion of Medi-Cal and affordable generic drugs have stalled, while homelessness continues to rise despite heavy investments. Newsom remains committed to reform but faces significant obstacles in his final two years.
The post Health Care Is Newsom’s Biggest Unfinished Project. Trump Complicates That Task. appeared first on kffhealthnews.org
Kaiser Health News
Health Insurers Limit Coverage of Prosthetic Limbs, Questioning Their Medical Necessity
SUMMARY: In 2023, Michael Adams faced insurance denial for a crucial prosthetic leg replacement. After losing his leg to cancer 40 years ago, he selected a health plan that covered advanced prosthetics, but his insurer deemed the replacement unnecessary, despite his doctor’s long-standing recommendation. This disparity in coverage, particularly between joint replacements and prosthetics, highlights ongoing discrimination in the amputee community. An estimated 2.3 million Americans live with limb loss, and many encounter barriers to obtaining necessary prosthetics. Leah Kaplan also struggled with insurance denial for a myoelectric prosthetic hand, emphasizing the financial and emotional toll of inadequate insurance coverage.
The post Health Insurers Limit Coverage of Prosthetic Limbs, Questioning Their Medical Necessity appeared first on kffhealthnews.org
-
Our Mississippi Home5 days ago
USM Awards Honorary Degree to Renowned Country Music Songwriter
-
Local News5 days ago
How to catch the Quadrantids, the first meteor shower of 2025
-
News from the South - Missouri News Feed5 days ago
Family aims to open cannabis cultivation facility in North St. Louis • Missouri Independent
-
News from the South - Alabama News Feed7 days ago
Family, officials speak out after 3 killed in Mississippi gas station robbery
-
SuperTalk FM6 days ago
2 teens arrested for trying to carjack Hinds County reserve deputy
-
News from the South - North Carolina News Feed6 days ago
North Carolina Forecast: Cooler weather ahead with freezing lows through the weekend
-
News from the South - North Carolina News Feed6 days ago
Conway falsely claims NC officials covering up storm deaths
-
News from the South - Florida News Feed6 days ago
People are talking about the possibility of snow in Florida. Here’s why it probably won’t happen