Following Gain, California To Reopen Health Coverage Signups
Speaker 1: 00:00 418,000 people who previously did not have health insurance signed up for coverage through covered California during this last enrollment period. And while that number could go up even further on a federal level signups for the affordable care act under the Trump administration have gone down. Now a new state law has gone into effect that taxes those without coverage and increases subsidies for some of those that sign up for coverage. Joining me to discuss this is Peter Lee, the executive director of covered California. Peter, welcome. Great to be with you. I mentioned that the number of previously uninsured people in the state could go up even further and that's because the enrollment period is being extended. What prompted covered California to reopen that enrollment period? Speaker 2: 00:46 Yeah, it's not actually reopening the enrollment period every year after open enrollment we have special enrollment for people who have lost covers cause they've lost their job. They moved. We're saying this year for one year, only through April a new reason. We'll let the door be open for you. You didn't know there was a penalty. You didn't know there was new state subsidies. And that's because we know, even though we've done a lot of marketing, a lot of outreach, a lot of Californians don't know that it's state law in California to get insurance if you can afford it. And if you don't, when you file your 2020 taxes, you're going to pay a penalty. And many people might not find this out until they get around to paying their taxes, which for many people isn't until March and April. So across the state from governor Newsome on down, we want this penalty to not be about getting money in the state coffers, but being that economic nudge to help people shop and find out how affordable healthcare is. And that's why I decided to extend this new opportunity to California through the end of April. Speaker 1: 01:51 And this is the first increase in enrollment after three years of decline, what do you attribute the increase in enrollment to? Speaker 2: 01:58 First it was a very big increase. So 40% means over 120,000 more people signed up. We had as many people sign up this year as we had the last year, this size 2016 and the reasons are really clear. The number one reason is governor Newsome. The legislature really had the courage to say the penalty matters. Now, look, penalties aren't popular but they help everybody because this year the penalty coming in place, health plans bet on more people signing up and lower their premiums. Premium increase this year less than 1% on average and that was because health plans thought the penalty wouldn't matter. That lowered costs for people that don't get subsidies. The second thing though is new money on the table and this is a big deal. Governor Newsome said the affordable care act a good program, but it's not the end point. Let's build on it and improve on it. Under the affordable care act, if you are a family of four you got no subsidy. If you made over $100,000 some people were spending 30% of their income on health insurance. California put in place new state subsidies to help lower income people, but also the middle class we saw in this open enrollment period, over 30,000 people getting these middle-class subsidies, on average, they were getting $500 a month to lower their healthcare costs. That helped people shop. It helped more people sign up. Speaker 1: 03:23 Mmm. And you know, how much is the new tax for people who don't have coverage? And how does it compare to the cost of insurance? Speaker 2: 03:30 The penalty which you pay when you file your taxes. It's not actually a tax, it's a penalty. Uh, depends on how much money you make and your family size. The minimum penalty for a single person, about $700 minimum penalty for a family of four, $2,000 but it'll go up if you make more money. Now, how's that compare to what your health insurance is gonna cost? It depends. Many people are getting subsidies, so they're spending $100 a month on their insurance. So in a year they might be spending $1,200. But the big thing about insurance isn't a trade off against penalty versus premium. People want health insurance. Californians know that if they show up at the hospital and don't have insurance, they're rolling the dice on walking out owing 50,000 a hundred thousand dollars so the trade off is really about understanding how affordable healthcare can be getting that health care and avoiding big costs and actually getting needed preventive services. Speaker 1: 04:27 So how do people who missed the January 31st deadline, who don't want to pay that penalty go about signing up now? Speaker 2: 04:34 Easy thing go to covered ca.com people can enroll online. One of the things we'll have to the answer the question is why would you qualify? There's a pull down. The first category is, I didn't know about the penalty. Check that box. You're good to go or go to a local insurance agent that's certified by us. You can go to our website, say, find help near me. You'll find on a Google map, hundreds of insurance agents, community groups throughout the San Diego area. Throughout California, the services are always free. Speaker 1: 05:04 The overall percentage of people signed up for covered California has also increased. How does that increase then compared to enrollment? In the federal marketplace. So one of the things we've seen is covered. Fornia Speaker 2: 05:17 kicked off our history in 2014 with big marketing spend with big enrollment. And by 2016 we had over one and a half million people in. That's been what we've been at basically since 2016 in contrast at the federal marketplace, which is the 37 States that rely on the federal government since 2016 they've declined by 14% which is almost a million and a half fewer Americans with insurance coverage. And so what we've done in California is say, look, the affordable care act works. Let's make it work better. Sadly, at the federal level, there's been policy after policy that discourage people from signing up for coverage. They don't spend anything on marketing. We spent $120 million on marketing. Why? By doing that, more people sign up, including healthy people, which means premiums in California are 20% lower than they would be if we weren't spending that money on marketing. So this is a, a real demonstration of what happens when a state leans in to make the affordable care act work. And seeks to build on it and make it better. Speaker 1: 06:24 So how does this increase in enrollment help the covered California marketplace as a whole? Speaker 2: 06:28 Yeah. Well first, the number one thing it helps is not just the marketplace. It helps people that don't get subsidies because how the rules work is if you're eligible for a subsidy, you never spend more than, you know, dependent on your income levels, say 9% of your income on healthcare. But that means if premiums skyrocket, you're protected by signing up the covered California. If you're not eligible for a subsidy, when premiums go up, which they do, if you don't enroll healthy people, you pick up the tab in much of the nation. People without subsidies are being totally priced out of insurance. It's the people can't afford it. Not the case. In California, not only do we have these new subsidies for the middle class premiums went up less than 1% that's the result of having more people insured in the individual market. It's a win win for people that get subsidies, but also for those that don't get financial help. Speaker 1: 07:23 I've been speaking with Peter Lee, executive director with covered California. Peter, thank you so much for joining us. Great to be with you. Thank you for having me.