Intersections: A monthly go-to for reliable facts and analysis about California's debt, investments and economy
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Conversations on Politics, Policy in the Golden State


Peter Lee
By Peter Lee

Covered California Provides ‘Culture of Coverage’ to Californians


In 2010, California was the first state in the nation to enact legislation creating a health benefit exchange under health care reform. The goal was to make health insurance more affordable and easier to purchase for individuals who for years – if not their entire lives – went without coverage and care.

Covered California, our state’s health insurance exchange, also created a marketplace for small businesses to offer its employees health care to improve productivity, morale and give participating businesses a competitive edge.

Since its formative years, Covered California has helped cut the rate of the uninsured by more than half in California, from 17% in 2013 to 7.1% in 2016, according to the latest survey from the Centers for Disease Control and Prevention (CDC).

California’s decrease of 3.2 million people is the biggest decrease in the raw number of people uninsured in the nation, representing more than the next three states combined, according to a U.S. Census report.

Nearly 3.7 million adults now have Medi-Cal as a result of California’s expansion of this insurance program for low-income individuals. Medi-Cal now serves more than 13 million people, or 1 in 3 Californians, including families with children, seniors and persons with disabilities.

While the active membership of Covered California is more than 1.3 million people, the exchange has actually helped insure more than 2.9 million people since it opened its doors.

But health insurance and care is not a numbers game. It’s not abstract.

I’ve met people who have never had health insurance. They lived in a culture of “coping” instead of a culture of “coverage.” But today they are getting quality health care for heart disease, breast cancer, and stroke. People are no longer denied coverage because of pre-existing conditions. Now, with insurance through Covered California in hand, they are getting treatment for high blood pressure, Type-2 diabetes, asthma and arthritis.

Yes, there have been bumps along the way. But Covered California takes pride in being a learning organization that listens to its customers and partners to provide improved products and services for Californians.

California’s success is due to support from elected officials and community partners across the state who have worked together to spread the word about affordable health insurance.

The demand for affordable health care insurance remains very strong, and Covered California continues to grow and make a difference in the lives of hundreds of thousands of people.
We are achieving the vision of improving the health of all Californians and assuring their access to affordable, high quality care.

Peter Lee is the executive director of Covered California. The opinions in this article are presented in the spirit of spurring discussion and reflect those of the author and not necessarily the Treasurer, his office or the State of California.

Jon Coupal
By Jon Coupal

What California Should Do When ObamaCare is Gone


The Affordable Care Act will soon be gone.  Most likely, it will be repealed outright by Congress fulfilling the campaign promise most members made during last year’s election.  But even if Congress can’t agree on the replacement for the ACA – the Republican proposal is being attacked from both the right and the left – it is abundantly clear that the program is not sustainable.  Insurers are leaving exchanges in droves; massive price increases which are much larger than those promised by ACA’s proponents; and unfunded and unsustainable deficit financing for subsidized coverage and Medicaid expansion should convince even the most ardent backer of the ACA that the program cannot continue.

It is true that, for a number of unique reasons, California has performed relatively well within the ACA as evidenced by the number of uninsured being cut by nearly half.  But even then, fully two-thirds of the “coverage gains” here have been in Medi-Cal (California’s Medicaid program), meaning that the costs have been borne by taxpayers purchasing health care for poor people.

*As of this writing, the ACA replacement plan has not been revealed.  But given the prior Republican proposals introduced in Congress in recent years, there is a fairly good chance that the replacement will contain a number of common elements.  These elements, taken as a whole, move health insurance in America from a top down structure to a more consumer oriented approach.  For example, one common provision is the expanded use of individual health savings accounts.  This, in addition to limiting or eliminating the excludability of employer-sponsored health benefits relate to tax code provisions as does replacing ACA premium tax credits and cost‑sharing reductions.

The Republican plan will likely make it easier to purchase and use catastrophic health insurance coverage and allow consumers to purchase health insurance plans out of state.  And, for California, perhaps the most dramatic change coming from Washington, is in converting Medicaid into a block grant or per capita allotment program.

Repealing the ACA by itself is conceptually easy.  But there are political difficulties in reducing taxpayer liabilities for subsidized coverage and Medicaid expansion without taking away coverage for people who’ve gained it under the ACA.  While policies that allow for out of state coverage, HSA expansion and tort reform show great promise in reducing costs, the effects will not be immediate.  In the meantime, the states – especially those like California that expanded Medicaid coverage – might find themselves picking up the lion’s share of the cost for coverage or expansion for people who’ve gained coverage.

More than any other state, California relied on massive federal subsidies.  One in three state residents is now enrolled in Medi-Cal because of the state’s adoption of the ACA optional Medicaid expansion.  But that is going to end soon as is the subsidy for coverage purchased on the state’s Health Benefit Exchange—Covered California.  (Of course under the ACA, many of the subsidies were being reduced anyway).

California would do well to prepare for healthcare policies that are consumer driven, not a one-size-fits-all government program. It should eschew big public relations, marketing and advertising budgets and, instead, for the truly needy, invest in community health clinics.  Instead of wasting energy shaking their fists at Washington, our policy leaders should reach out early and often to make the replacement of ACA as painless as possible.

*Editor’s note: On March 6, House Republicans released a plan to replace the Affordable Care Act.

Jon Coupal is president of the Howard Jarvis Taxpayers Association. The opinions in this article are presented in the spirit of spurring discussion and reflect those of the author and not necessarily the Treasurer, his office or the State of California.