SACRAMENTO, Calif. 鈥� When Gov. Gavin Newsom took office four years ago, the Democrat went after Republicans on the national stage as they sought to . Key to his ambitious health care agenda: reinstating the fine on Californians who don鈥檛 have health coverage, which had at the federal level.
It was a tough sell for a new governor, and Newsom needed strong allies among state Democratic leaders, who at the time, in 2019, voiced concern about essentially levying a new tax on Californians unable to afford the rising cost of health care. Democrats, who, then as now, controlled the state legislature, ultimately backed Newsom in exchange for a promise: The state would levy the fine but use that money to provide financial assistance to offset out-of-pocket costs for Californians purchasing health insurance on the state exchange, Covered California.
But Newsom, now in his second term, has since backed off that promise. His administration is holding on to revenue raised from the so-called 鈥� the requirement that people have health coverage or pay a fine. And his proposed budget for the upcoming fiscal year beginning July 1, which is being debated in the state legislature, funnels the money to the state鈥檚 general fund.
That is infuriating fellow Democrats who accuse him of breaking a promise and disregarding the millions of Californians who can鈥檛 afford their deductibles and copays.
California began fining the uninsured in 2020, raising an estimated $1.1 billion over the first three years 鈥� and the Newsom administration projects it will bring in more than $700 million more over the next two years, bringing the projected five-year total to $1.8 billion, according to the state Department of Finance. Democratic leaders said Newsom鈥檚 tactic of holding back the money for the general fund is a 鈥�.鈥�
鈥淢oney from the mandate should stay in health care,鈥� Senate President Pro Tem Toni Atkins told 黑料吃瓜网 News, arguing the state should be distributing money now to help people afford health coverage. 鈥淚 don鈥檛 know what we鈥檙e waiting for. We鈥檝e got to figure out a way to make health care more accessible, and there鈥檚 no question that the cost of health insurance is a barrier.鈥�
Democratic lawmakers are expected to continue ratcheting up pressure on Newsom in hopes of reaching a deal by their to pass a budget bill. 鈥淲e鈥檝e always felt that the money is meant to bring insurance costs down,鈥� said Democratic Assembly member Phil Ting, chair of the Budget Committee.
Newsom in 2019 stumped for the individual mandate amid concerns over rising insurance premiums, vowing to reduce Covered California consumer health care costs while setting himself apart from then-President Donald Trump, who was attacking the . Congressional Republicans had gutted the federal penalty 鈥� part of the Affordable Care Act 鈥� in 2017. Newsom argued it would still work in California to lower health care costs, and to help him achieve his goal of universal health care 鈥� the centerpiece of his .
Newsom now argues that federal health insurance subsidies that offset the cost of monthly premiums are sufficient. And, in the face of a projected $32 billion state budget deficit, Newsom says California cannot afford to spend the money and further reduce out-of-pocket costs. He argues spending the money to slash deductibles, for instance, 鈥� His proposed budget would instead keep the money for the state鈥檚 general fund, to be used for anything California wants to spend it on.
But health care advocates who lobbied in favor of the fine, as well as many Democratic lawmakers, say the funds could be lifesaving and should be distributed now.
鈥淭he individual mandate was not intended to create funds for other government programs outside of health care,鈥� said Democratic Assembly member Jim Wood, of Santa Rosa, chair of the Assembly Health Committee, at a heated budget hearing this spring. 鈥淭he clear intent of the legislature was that this money was meant to go to affordability.鈥�
Wood said he might have rejected Newsom鈥檚 plan if he had known the revenue it generated would be deposited directly into the general fund. 鈥淚 don鈥檛 think I would have supported it,鈥� he said. 鈥淚t just feels like a violation of what we thought we were doing.鈥�
Soaring out-of-pocket health care costs, for insurance premiums and deductibles for instance, are leading people to forgo health care. In California, a staggering 52% of residents in the past year for financial reasons, according to a recent survey by the nonprofit California Health Care Foundation. (黑料吃瓜网 News publishes California Healthline, which is an editorially independent service of the .)
Diana Douglas, a lobbyist with Health Access California, which was part of the coalition that backed the state鈥檚 coverage mandate in 2019, said Newsom must recognize soaring costs and spend the money now on affordability assistance. 鈥淭his penalty money should be used to help Californians afford coverage and care.鈥�
Health insurance plans offered by Covered California are continuing to get more expensive. Deductibles for a midtier insurance plan, for example, will jump to $5,400 next year, according to Covered California, up from $4,750 this year and just $3,700 two years ago.
And even many Californians who are purchasing coverage are putting off treatment in the face of high costs. A survey by Covered California in 2022 found that 48% of its consumers due to cost.
Newsom this spring dodged a question by 黑料吃瓜网 News about the criticism he is facing over his push to retain the mandate money, saying simply he鈥檚 鈥減roud鈥� to have established the state coverage mandate and noting that federal premium subsidies are available for Californians purchasing coverage via Covered California. His administration defended the push to funnel money into the general fund, saying revenues would be repaid to a special health fund and be available to use on health care eventually, if the federal government cuts back . Administration officials argue that Newsom is essentially borrowing the money and say it鈥檒l be repaid later 鈥� though lawmakers have expressed concern that he鈥檒l never make good on that promise.
Critics and some Democratic lawmakers say holding back the money is a double whammy for low- and middle-income residents who are struggling to pay for coverage, and argue that it amounts to a tax on the poor. 鈥淚t feels like we鈥檙e trying to save it on the backs of our low-income communities,鈥� said Democratic state Sen. Caroline Menjivar, who represents the state鈥檚 San Fernando Valley.
Democratic lawmakers this year are backing an alternative proposal, championed by Health Access California, to spend revenue from fining uninsured residents on increasing health insurance subsidies for low- and middle-income people. They would be making good on a deal advocates secured with state Democratic lawmakers last year to reduce or eliminate out-of-pocket costs in Covered California and scrap deductibles entirely for a mid-tier plan.
鈥淲e need to make sure people not only have health coverage, but that they can also afford to actually use it,鈥� said Ronald Coleman Baeza, a health care lobbyist with the California Pan-Ethnic Health Network.
Although Newsom and his Democratic allies have passed major expansions in coverage, the state does not have universal health care. Experts say , including unauthorized immigrants who earn too much to qualify for Medi-Cal, and lawmakers are growing increasingly agitated that not all residents who are insured can afford to use their coverage.
鈥淭here was a clear commitment that these dollars were going to be used to bring down heath care costs, and we haven鈥檛 done it,鈥� said Assembly member Pilar Schiavo, a Democrat representing the Santa Clarita Valley, who that would require any revenue raised from the individual mandate be permanently set aside for health care. Though it died this year, it can be revived next year, and advocates say they will continue pressing Newsom to distribute the existing money to Covered California consumers.
鈥淲e need to keep our promises,鈥� Schiavo said. 鈥淚f you have insurance that you can鈥檛 afford to use, or you鈥檙e afraid to go see the doctor because of how high that bill might be, then you don鈥檛 truly have access or universal coverage.鈥�
This article was produced by 黑料吃瓜网 News, which publishes , an editorially independent service of the .听