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Column: California is still showing how to make Obamacare work, even with COVID-19

Michael Hiltzik, Los Angeles Times on

Published in Business News

Amid the patchwork of state-level approaches to healthcare reform, California has always stood out for its all-in embrace of the Affordable Care Act.

The state expanded Medicaid, taking full advantage of a federal government subsidy of the expanded program's costs -- starting at 100% from 2014 to 2016 and settling at 90% this year and beyond.

It established its own individual insurance exchange, Covered California, and managed it actively so that coverage options and expenses would be understandable for applicants and benefits would be consistent.

When the Trump administration and Congressional Republicans pursued a strategy of undermining the ACA by cutting marketing budgets and allowing cheap junk insurance plans to flood the market, California resisted.

The state banned junk plans, instituted an individual mandate penalty as a substitute for the penalty the GOP Congress repealed in 2017 and extended premium subsidies further into the middle class than the federal subsidies did.

The result has been continued strong enrollments and comparatively moderate premium increases. More than 418,000 Californians enrolled in Covered California during open enrollment for the first time for 2020, a 41% increase from the year before. The state exchange covers about 1.5 million members.

 

As I reported a few months ago, during that halcyon era before COVID-19 became the nation's No. 1 concern, since the inauguration of the individual insurance exchanges in 2013, California's uninsured rate has fallen by 10 percentage points, to 7.2%.

That's the largest drop in the nation. Among "eligible uninsured" people -- that is, excluding those barred from participating because of their immigration status, such as adult undocumented residents -- the rate is even lower, 3%.

The question this spring was whether the coronavirus would upend the system Covered California created. The answer appears to be no. Covered California on Tuesday announced that average premiums for 2021 will rise by 0.6% -- even lower than the 0.8% increase charged for coverage this year over last.

Customers willing to shop for new 2021 plans, the exchange says, can do even better -- reducing their rates by an average of 7.3% statewide and as much as 13.4% in parts of Los Angeles County, without changing their benefits. The figures don't reflect state and federal subsidies, which can reduce premiums even further.

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