California Health Insurance Reforms
Recently, California also has taken steps aimed at further bolstering the affordability of health care and insurance within the state. After Congress eliminated the tax penalty designed to enforce the individual mandate for people to obtain health insurance, California enacted its own individual mandate penalty. This state-level policy was designed to encourage more people to enroll in health coverage, enhancing the stability of California’s health insurance individual market and preventing a scenario where healthy people opt out of purchasing health insurance, which could cause premiums to increase.*
Additionally, due to concerns that individual-market coverage still wasn’t sufficiently affordable for people with incomes above the ACA’s income limit of 400% of the federal poverty guidelines (FPG), as well as some with incomes below 400% FPG, California enacted its own individual-market subsidies for people purchasing coverage through Covered California. Because both of those California policies begin in 2020, this issue brief doesn’t account for their impacts on affordability of health insurance in the state. To understand their impacts, it will be important to continue monitoring affordability in California in the coming years.
*Uninsurance Rates for California in 2013 and 2014 (PDF), State Health Access Data Assistance Center, n.d.
With implementation of the Affordable Care Act (ACA) in 2014, many Americans have obtained health insurance with the help of public coverage, through expanded Medicaid eligibility for people with low incomes and through government subsidies to make private individual-market coverage more affordable for people with moderate incomes. While the ACA dramatically reduced uninsured rates in the US and in California, affordability of health insurance and health care continue to pose challenges for many people.
This issue brief explores the affordability of health coverage in California in 2018, the latest year for which data are available, with a particular focus on health insurance deductibles and on who reports the greatest affordability challenges. It also explores what data suggest about some of the consequences of those challenges, such as taking on credit card debt to pay medical bills and trouble paying for basic necessities, including food and housing. Where possible, this issue brief compares data in 2018 to 2013, the last year before full implementation of the ACA, to assess trends under the ACA.
The COVID-19 pandemic emerged in California when this issue brief was being written. Affordability is one of many important factors that may shape Californians’ willingness to seek, and their ability to obtain, the health care they need during this public health crisis. While the data analyzed here precede the pandemic, they paint a picture of important trends in Californians’ ability to afford health care coverage and care a little more than a year before the pandemic hit.