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Starting in 2019, Americans will no longer be required to carry health insurance. But Californians might — if a state insurance mandate becomes a reality.
Democratic state Sen. Ed Hernandez, chairperson of the Senate Health Committee, said he’s reaching out to consumer groups, health plans and the administration about the possibility of a statewide individual insurance mandate to replace the federal requirement that was eliminated by Republican lawmakers late last year.
Hernandez didn’t give specifics about what California’s version could look like.
“If we were to do it, what’s the mechanism?” he said. “We don’t have a tax mechanism like the IRS — we could figure it out through the state. There’s a lot of nuances of how that would occur.”
Gerald Kominski, a health policy expert with UCLA, says it’s doable for California. The state would be able to determine for itself how much the penalty would cost. Massachusetts has had its own insurance requirement since 2007, and Kominski said the penalties are even higher than those mandated by the ACA.
“I think it would be relatively easy for [California] to implement because it’s done through the income tax, and I think the state could replicate the federal 1095 form,” Kominski said.
That’s the form asking taxpayers whether they have health insurance.
Debra Kelch, president of the Insure the Uninsured Project, said it wasn’t just the mandate that got people on board with health insurance. “In California, we did an extended enrollment timeline, we do additional marketing, we do a lot of outreach in communities,” she said. “There’s all these factors.”
Since the individual mandate took effect, California has cut its number of uninsured residents in half. In 2014, roughly 6 percent of Californians paid a penalty for not having insurance, according to data collection group Policy Map.
Enrollment for the Covered California insurance marketplace closed Jan. 31, but Medicaid enrollment continues.
Kominski said the gains are also due to federal subsidies that will stay in place. He said the market will not experience a “death spiral” in the absence of an insurance requirement.
“Death spirals occur when healthy people leave the marketplace, and the next year more healthy people drop out because the price has gone up,” he said. “It can happen relatively quickly. The premiums rise so rapidly that no one wants insurance anymore. I have no reason to believe the repeal of the mandate will lead to that.”
Sally Pipes, head of the free-market think tank Pacific Research Institute, says there are better options for California than an insurance requirement.
“We shouldn’t go that route,” she said. “The individual mandate distorts the market. So I think we need more options for people to buy coverage, like short-term plans, rather than bringing in a mandate that will really hurt lower-income Californians.”
Supporters of an individual mandate in California say they hope to also see provisions that would also make health insurance cheaper for low-income residents.
California previously considered a statewide insurance mandate under former Gov. Arnold Schwarzenegger’s administration.