SAN FRANCISCO (KPIX 5) -- The $215 billion dollar budget passed by the Assembly and Senate Thursday expands access to health insurance, but will also penalize those who do not get health insurance.
It expands Medi-Cal coverage for undocumented, low-income people under 26 years old, and increases subsidies for people purchasing health insurance so that middle-income people and families can get assistance.
On the other hand, it will impose a penalty for those who fail to get health insurance, around $695 or 2.5% of household income, whichever is higher.
Currently, all undocumented residents of California who have low incomes can enroll in a Restricted Medi-Cal program that covers things like emergency room visits and pregnancy. The Legislative Analyst's Office estimates this program will cost the state $1.75 billion dollars in fiscal year 2019-2020.
The LAO also claims that 80 percent of undocumented people who are eligible for this coverage are enrolled in the program.
In addition, since 2015, all undocumented Californians who are 18 and younger and live in low income households -- $68,495 per year for a family of four -- can get full Medi-Cal benefits. This costs the state about $300 million per year.
This year's budget extends full Medi-Cal coverage to all low-income ($17,236 for an individual; $35,535 for a family of four) undocumented people who are aged 19-25. The amount budgeted is $98 million, of which $74 million is from the general fund. The expansion would begin on January 1, 2020.
"There's a lot of criticism to that very small expenditure," Assemblyman Phil Ting (D-San Francisco) told KPIX. "It's only $74 million dollars in our general fund, out of the $200 billion."
Ting says taxpayers already foot the bill for undocumented people, even the ones who have Restricted Medi-Cal insurance to cover emergencies. "There is coverage, but that's why we wanted to expand it," he explained. "Because what we really want to do is not have people go to the emergency room," and instead, "get in the habit of seeing their primary care doctor, get their physicals, do those annual visits so that they can really take care of their health rather than go to the emergency room when something is catastrophic."
When asked why this "we're already paying for it" rationale doesn't apply to people over 25, Ting said the difference is the source: the state versus local governments.
Right now, when people seek medical help, "the people spending the money are usually the counties because people go into county hospitals" which is an expense for the counties. Ting would like to see the state take over those costs for all people and hopefully reduce them through Medi-Cal, but the goal this year was to "limit new ongoing spending to about $3 billion dollars" and "once you added in K-12 schools, once you added in UC, CSU, there's only a certain amount of money left for healthcare."
But should we also be investing in the system and people already on Medi-Cal?
"Medi-Cal is already failing to provide the services to the people that need it most in California," Assemblyman Jay Obernolte (R-Big Bear Lake) told the Assembly. "Every day my district offices gets calls from my constituents who are unable to see a doctor even though they are technically covered by Medi-Cal because so few doctors in my district are able to take the low reimbursement rates that Medi-Cal provides. We had the opportunity to fix that with this budget and we're not doing it."
There is good news for people making between 400 and 600 percent of the poverty level, which is between $103,000 and $154,000 for a family of four. The budget includes $1.45 billion dollars over three years for health care subsidies, mostly for those middle income people.
There is also bad news for people who elect not to get insurance: the expanded subsidies will be funded in part by reinstating the penalty for failing to have health insurance.
The penalty amount will be based on a federal calculation, which in 2016 was $695 per adult or 2.5% of household income, whichever was higher. The penalties are expected to generate $1 billion dollars over three years.
The specifics of the bill to penalize uninsured people have yet to be worked out, and will be in a "trailer bill" that will pass in the next few weeks.
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