California: FANTASTIC! Newsom to propose ACA subsidy threshold increase, mandate reinstatement, further Medicaid expansion & more!

Some awesome news out of the Golden State today:

Gov. Gavin Newson announced sweeping proposals to tackle the state’s healthcare needs shortly after taking office on Monday, outlining a dramatic Medi-Cal expansion that would cover young undocumented adults, a requirement that all consumers in the state carry health insurance and increased subsidies for middle-class families to help those who need it.

...Newsom campaigned on a universal healthcare platform and has said the issue would be among his top priorities. His announcement on Monday stopped short of the single-payer system demanded by activists that would cover all residents’ healthcare costs, but was characterized as the first step down that path.

According to the article, Newsom, who just took office a few hours ago, already plans on rolling out his proposed state budget on Thursday, which is expected to include, among other things:

  • Expanding Medicaid even further within the state, to cover undocumented children until they turn 26 years old (they're already covered through age 19 today)...fully state funded
  • Reinstating the ACA's individual mandate penalty at the state level, as New Jersey and DC have already done (along with Massachusetts, which never repealed their pre-ACA mandate penalty), and as Vermont will do starting in 2020, to reverse the $580/yr average premium hike caused by Congressional Republicans repealing the national mandate penalty last winter, paired with...
  • Increasing the ACA subsidy income threshold to 600% FPL!

This, of course, is something I've been clamoring for for years. As I noted yesterday, bumping up the cut-off point from 400% to 600% FPL isn't as good as removing the cap altogether, but it's a hell of a lot better than keeping it where it is. I don't know what precisely Newsom has in mind, but I'm assuming it would simply mean extending the 9.86%-of-income maximum cost for Silver benchmark plans from the 300-400% FPL range up to 300-600% FPL, which should cover the vast bulk of those currently stuck paying full price for ACA-compliant individual market policies.

Again, these additional subsidies would have to be fully paid for using state funds...some of which would presumably come from the additional revenue generated by, wait for it...the reinstated mandate penalty!

In additon...

Newsom signed an order to create a Surgeon General oversight position in the state and to consolidate pharmaceutical purchases in hopes of lowering drug costs for the state and consumers. Under the current system, Medi-Cal and state agencies separately negotiate prescription drug prices. Under the order, Newsom’s office said the state would become the largest single purchaser of prescription drugs.

These are all fantastic developments. I hope all of them go through, although I realize reinstating the mandate penalty could be dicey (I wasn't surprised that Vermont and DC created theirs, but was pleasantly surprised that New Jersey managed to pull it off).

Oh yeah, and one more thing:

  • A federal 1332 Waiver request to potentially move towards state-based single payer down the line

If approved by CMS and the Treasury Dept. (neither of which, of course, would ever happen under a Republican administration), this would pave the way for all federal healthcare dollars currently going towards Medicare, Medicaid, ACA subsidies, the VA and so forth in California being authorized to be repurposed to instead go towards partly covering the cost of a state-based single payer system.

It’s important to note that the 1332 State Innovation Waiver is itself PART OF THE AFFORDABLE CARE ACT.

That’s right...if California or any other state does manage to switch to single payer, it will be THANKS TO THE ACA.

Just figured I should mention that.

Those of you who know me know that I’m still skeptical of a full-blown single payer system going through at either the federal or state level in the near future; I still think there will have to be a few more intermediate stages before we get there.

However, I have no problem with Newsom taking a shot at it...as long as he doesn’t ignore protecting, repairing and strengthening the ACA in the meantime as well, which the other measures show he’s also doing.

I should also note that outgoing Governor Jerry Brown also deserves a lot of credit for shepherding California through the past eight years and cleaning up the books so well that the state has a massive surplus which can now be used to fund some of the provisions listed above.

Meanwhile, Covered California itself has already chimed in with a big show of support:

BREAKING: Peter V. Lee, executive director of @CoveredCA, on @GavinNewsom letter to Washington leaders, "We applaud Governor Newsom for building on the strong foundation of the Affordable Care Act in his first official action..." 1/4 https://t.co/L7wPuy55Hl

— Covered California News (@CoveredCAnews) January 8, 2019

BREAKING (cont.): "The governor is not only embracing policies that will lower the cost of coverage for millions in the individual market, he is also offering increased help to those who are struggling with rising costs..." 2/4

— Covered California News (@CoveredCAnews) January 8, 2019

BREAKING (cont.): "The governor’s plan to make health care more affordable and restore the individual shared responsibility provision, which was repealed by the federal government in 2019, will lower health care costs for millions and increase enrollment..." 3/4

— Covered California News (@CoveredCAnews) January 8, 2019

BREAKING (cont.): "We believe the provision will help ensure stability so that CA continues to build on its success to reach universal coverage. As we enter the final week of open enrollment, this is a clear signal for Californians to sign up for coverage through Jan. 15." 4/4

— Covered California News (@CoveredCAnews) January 8, 2019