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Covering California's Uninsured: Three Practical Options

Rick Curtis and Ed Neuschler, Institute for Health Policy Solutions

This report compares three models that have the potential to achieve near-universal health coverage in California and provides the estimated costs of each for the government, individuals, and employers.

Momentum is growing in California — in both the public and private sectors — to make health coverage affordable and available for all, or nearly all. To help inform the development of solutions, CHCF funded a project to identify workable coverage models.

The results of this effort, available in both an executive summary and a detailed analysis, highlight three alternative approaches to coverage:

  1. Basic Individual Mandate, requiring individuals to obtain coverage and making government subsidies available for low-income Californians;
  2. Pay or Play Plus, combining an individual mandate and subsidies with required employer contributions; and
  3. All-Consumer Choice Exchange, replacing today's employer-by-employer coverage system with a "choice pool" funded primarily by payroll fees on all employers and workers.

The 2006 report finds that requiring individuals to participate in coverage is essential to any approach to bring all (or virtually all) of the uninsured into coverage. All three models include subsidies for low-income Californians, tax sheltering of worker contributions, and a health insurance exchange for those not eligible for employer coverage. The alternative coverage approaches presented feature varying degrees of employer responsibility.

The key purpose of the analysis was to estimate the respective costs under each model to the government, individuals, and employers. The resulting reports are intended to inform policymakers in their development of proposals and to identify workable designs.

The project’s executive summary provides an overview of the three approaches that were developed, analyzed, and refined in consultation with numerous experts. It also identifies their essential components, compares cost estimates, and describes how each would affect employers, individuals, and the state budget.

The complete report provides detailed descriptions of the alternative coverage models, including their common elements, differentiating features, key assumptions, and estimated costs. It also highlights health care cost trends and comparisons of the models by source of coverage and estimated cost by payer.

Both the executive summary and the full report are available under Document Downloads.