Despite that 93 percent of Californians have health insurance, the California Legislature voted Monday to tax California citizens who do not buy health insurance. This penalty revenue will be used to fund health insurance subsidies to encourage more people to purchase health insurance, and to provide health care to illegal immigrants.
Passage of SB78 creates the “Individual Mandate” to require Californians to purchase health insurance, and imposes a fine for failure to do so.
The nonpartisan Legislative Analyst’s Office warned this could indirectly result in increased state costs in Medi‑Cal, and/or if the individual mandate actually succeeds in more Californians signed up for state health insurance, fewer Californians will pay the penalty tax resulting in less money.
Data from the Affordable Care Act shows that the people most likely to owe the penalty are young, healthy people with jobs that pay $30,000 to $50,000 per year. “It makes no sense that young people making $30-50k per year are paying so that other people making $75k-130k per year can get a subsidy,” Assemblywoman Melissa Melendez (R-Lake Elsinore) Tweeted. “The fine, or tax because that’s what it is, is $695 per adult, $347.50 per child, or 2 1/2 percent of a household’s gross income, whichever amount is greater.”
It makes no sense that young people making $30-50k per year are paying so that other people making $75k-130k per year can get a subsidy.
— Melissa Melendez (@asmMelendez) June 24, 2019
Gov. Gavin Newsom’s plan to reinstate the individual mandate is to force healthy people to buy the state health insurance. In essence, the people who will be punished are the ones who can’t afford insurance because they don’t receive subsidies for not buying the some of the most expensive insurance in the country, and will likely cost them $14,000 per year, and will not be actual insurance until the $5,000 deductible is paid. This penalty/tax will be used to pay for the health coverage for illegal immigrants.
Lawmakers also approved a bill that to provide Medi-Cal government-funded health insurance to illegal immigrants, in the country illegally. Since both of these were covered in Gov. Gavin Newsom’s original budget, it is anticipated he will approve both within the budget trailer bill.