Once he was sworn-in Monday as California’s 40th Governor, Gavin Newsom wasted no time in getting to work on his campaign promises, proposing state-funded full scope Medi-Cal healthcare coverage to 138,000 illegal immigrant adults ages 19-26. Newsom also reinstated the Obamacare individual mandate requiring everyone to buy insurance or face tax fines.
In December 2017, Congress passed the Tax Cuts and Jobs Act, and eliminated the Obamacare individual mandate penalty; Newsom is bringing it back for California residents.
According to a report by the California Legislative Analyst’s Office in 2017, seven percent of the state’s population is uninsured, and more than half of the state’s uninsured residents are illegal immigrants. “The remainder of the uninsured are legal residents who have elected not to sign up for healthcare coverage,” the LAO reported. “A significant portion of uninsured legal residents are likely currently eligible for public financial assistance to obtain healthcare coverage either through Medi-Cal or through Covered California.”
Newsom also proposed giving subsidies to middle-class families that don’t qualify under the Obamacare health care law. Newsom’s plan would provide financial assistance to individuals who make up to $73,000 a year, and to families of four making up to $150,000 annually.
Newsom also signed an order to boost the state’s bargaining power in negotiating prescription drug prices.
Gov. Newsom sent a letter to President Donald Trump and congressional leaders seeking more authority over federal health care dollars and policies. “When everybody is pooled together it means lower cost for each and every one of you,” Newsom said in a video broadcast on Facebook as he signed the orders. “The spirit of this is about bringing down costs.”
But single-payer healthcare hasn’t been easily passed in California. In 2017, the state Senate passed Sen. Ricardo Lara’s single-payer healthcare bill without addressing cost control, who would be covered under the program, and whether federal funds would be considered. Sen. Lara’s (D-Los Angeles) bill would have provided free healthcare to any “individual whose primary place of abode is in the state, without regard to the individual’s immigration status.” Assembly Speaker Anthony Rendon shelved the bill because of the unsure funding issues.
The LAO reported at the time that healthcare expenditures already accounted for nearly 30 percent of the state budget. In 2017, total state spending for all purposes was expected to be $180 billion, according to the LAO.
The LAO estimated that Sen. Lara’s single-payer healthcare bill would run up nearly $400 billion in healthcare expenditures in California in 2017. According to the Associated Press, in 2019, the estimated price tag will be $760 million.
While the new administration’s actual state funded healthcare cost figures will be released Thursday, the LAO did an estimate in May 2018 of what the costs would be, estimating that extending full scope Medi-Cal to undocumented young adults would cost the state $140 million out of the General Fund in the first year. However, this is based on covering only 111,000 undocumented immigrants in that age group. California uses state funds to cover illegal immigrants on Medi-Cal, up to age 19. Newsom wants to extend this to age 26, covering an additional 138,000 people at a cost of about $260 million a year, according to Newsom’s spokesman, Nathan Click.