How to Protect California’s Healthcare System

Nicholas Bagley - California's Healthcare MandateBefore health reform, 1 out of every 6 Californians was uninsured. By 2016, only 7.4% lacked coverage.

Because it expanded its Medicaid program, California has provided insurance to its most vulnerable residents. An additional 1.6 million people get coverage through California’s exchange, where premiums are among the cheapest in the country and the average rate increase for 2017 was just 5%, a strong sign of a stable market…

All of this progress is now in jeopardy, and even congressional Republicans seem to understand that their Obamacare “fix” is folly. That’s why the bill delays the harshest spending cuts until 2020, when the 2018 midterm elections are behind them.

But the Republican bill would set chaos in motion because it would immediately eliminate the individual mandate — that is, the tax penalty imposed on those who don’t purchase insurance. Without that mandate, some healthy people will choose to forgo coverage, knowing they can always enroll later if they get sick. Those who keep their insurance will therefore be less healthy than average. Insurers will have to jack up their premiums to cover those sicker enrollees.

That means California’s stable market will start to teeter. Large premium spikes are likely; in some rural areas, insurers might pull out altogether. The Commonwealth Fund estimates that 1 out of 4 people on the exchanges would lose their coverage…

California has a shot at preventing that collapse, however, as do other states where Democrats are in charge, including New York, Connecticut, Washington, and Oregon. For 2018 and 2019, almost every part of Obamacare except for the individual mandate will remain intact. California can patch that hole by replacing the individual mandate at the state level. Call it the Golden State Mandate.

–Nicholas Bagley
The GOP Obamacare Replacement Would Help the Rich, Hurt the Poor and Unleash Chaos

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