Under the Affordable Care Act (ACA), California has seen the largest coverage gains of any state and early indicators show that Covered California, the state’s individual insurance market place, is doing well during the first month of the open enrollment period for 2018 plans. However, Senate Republicans are seeking to reverse these positive coverage trends by eliminating the ACA’s individual mandate in their tax bill. Despite their failure to repeal it this summer and growing public opposition to repeal, congressional Republicans remain dogged in their efforts – now through an apparent unrelated tax reform bill. On November 16, House Republicans passed its own version of a tax bill without including the repeal of the individual mandate.
Not only does the Senate tax bill transfer wealth from low- and middle-income families into the hands of the super-rich and multinational corporations, it also increases the deficit by $1.5 trillion, opening the way to cut Medicaid, Medicare, and other critical programs for low-income people in order to pay for the tax cuts later. To make matters worse, repealing the individual mandate would harm low and moderate-income consumers by increasing the number of uninsured Americans by 13 million by 2025, raising individual market premiums by about 10 percent, and causing further uncertainty and instability in the individual health insurance market. The loses in health coverage come not only from people who will no longer be insured in the marketplaces, but also 5 million people enrolled in Medicaid.
This latest effort to sabotage the law comes on the heels of the administration’s abrupt elimination of the Cost Sharing Reduction payments to insurers in the marketplace on October 12. California scrambled to minimize the impact on the states consumers by implementing a “CSR surcharge” that requires Covered California’s 11 insurance carriers to load the lost revenue of CSRs onto Silver-level premium rates so most consumers would not see a significant change in the net price they pay for their 2018 monthly premium.
For Californians, this repeal means that millions of the 13.5 million Californians on Medi-Cal and hundreds of thousands of the 1.5 million Covered California enrollees could lose their coverage, and premiums for marketplace enrollees will rise again, further destabilizing the state’s marketplace. Moreover, the picture here may be worse than the Congressional Budget Office estimates actually predict. In an April study, Covered California estimated 320,000 Californians would be uninsured in 2018 without the mandate. Covered California also previously estimated that without enforcement of the individual mandate penalty, the average premiums in 2019 could be 15 to 20 percent higher than they would be otherwise. If the individual mandate is repealed, this higher rise in premiums for the 2019 plan year is certain to occur.
With premiums increasing in double-digits and more people dropping out of Medicaid or the marketplace, the stability of the marketplace will be in jeopardy as sicker people remain and more insurers leave. The state cannot afford to go back to the high numbers of uninsured that predated the ACA and the individual mandate elimination buried in this harmful tax reform bill must be stopped.