How California's New Budget Affects Healthcare

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California governor Gavin Newsom’s first budget will help some afford health insurance, while fining those who don’t purchase it.

If they buy their own health insurance, some of the $215 billion budget will help more than 900,000 California residents pay their premiums. New health care subsidies will cap premiums at a percentage of income on a sliding scale between 200 to 600 percent of the federal poverty level.

So, if you make less than 600 percent of the poverty level – about $150,600 for a family of four – you may be eligible to get financial assistance.

According to Health Access, a group that advocated for the subsidies, on one end of the scale an individual making $24,280/year will have premiums capped at about 6% of income. On the other end, people earning $72,840 would have premiums capped at 18%.

State legislators cited a recent study favoring the expansion, saying that without it “the uninsured rate will rise to 12.9 percent by 2023 – a 24-percent increase from 2016.”

To pay for the subsidies, California will implement the individual mandate, which was first part of the Affordable Care Act, but was then removed at the federal level in 2017. This mandate imposes a penalty upon anyone who does not have health insurance. Imposing it at the state level will shore up California’s health insurance marketplace and keep premiums from dramatically rising.

The individual mandate is expected to bring in roughly $1 billion for premium assistance over three years. Premium subsidies will also be supplemented by an additional $450 million over the same time frame.