June 10, 2019 08:05 AM - Modern Healthcare
Associated Press
Some low-income adults in California living in the country illegally will soon get their health benefits paid for by taxpayers.
Democrats in the state Legislature on Sunday agreed to make adults between the ages of 19 and 25 eligible for the state's Medicaid program. Not everyone will get those benefits, only people whose incomes are low enough to qualify for the program. State officials estimate the program will cover an additional 90,000 people at a cost of $98 million.
"California believes that health is a fundamental right," said state Sen. Holly Mitchell, a Los Angeles Democrat who led the budget negotiations.
The move continues to stake California's position as a bulwark against the policies of Republican President Donald Trump. While the Trump administration has worked to weaken the healthcare law signed by former President Barack Obama, the budget agreement approved Sunday and expected to pass the state Legislature later this week would strengthen California's commitment to the law known as the Affordable Care Act.
In addition to covering some adults living in the country illegally, California's proposed $213 billion budget would make the state the first in the country to help families earning as much as six times the federal poverty level pay for their monthly health insurance premiums. That means families of four earning $150,000 a year would be eligible for help of about $100 a month.
But to pay for part of it, the state will begin taxing people who don't have health insurance. It's a revival of the individual mandate penalty that had been law nationwide under Obama's healthcare law until Republicans in Congress eliminated it as part of the 2017 overhaul to the tax code.
Republicans on the legislative committee negotiating the budget voted against the proposal, arguing it was not fair to give health benefits to people who are in the country illegally while taxing people who are here legally for not purchasing health insurance.
The budget agreement still must be approved by the full state Legislature. State law requires lawmakers to enact a budget by midnight on June 15. If they don't, lawmakers would lose their pay. Democratic Gov. Gavin Newsom has 12 days to act on the budget once lawmakers pass it. In a news release, Newsom said the budget initially approved by lawmakers on Sunday is balanced and "creates historic reserves" and said he looks forward "to continuing to work with the legislature."
The healthcare proposals are a win for first-term Democratic Gov. Gavin Newsom, who proposed both of them. Several lawmakers in the Democratic-dominated state legislature wanted to go further by offering health coverage to all adults living in California illegally. But Newsom opposed that, noting it would cost $3.4 billion.
Newsom did not get everything he wanted in the deal. Advocates say more than 1 million people in California don't have access to safe drinking water. Newsom had proposed a 95-cent tax on most residential water bills as well as fees on dairies, animal farms and fertilizer sellers, to help water districts pay for improvements and boost supplies.
Lawmakers rejected the tax, arguing it was too burdensome in a year when the state is projected to have a $21.5 billion surplus — the largest in at least 20 years.
Instead, lawmakers decided to use $130 million in existing tax revenue to pay for the drinking water improvements. Most of that money — about $100 million — would come from the state's sale of carbon credits as part of its "cap and trade" program. The move means the state's agricultural industry, whose pollution is often blamed for the drinking water problems, would have about $100 million less than it normally gets from the program for various projects.
Newsom also wanted to spend an additional $800 million to boost the annual tax refunds for low-income people who have at least one child under the age of 6. But to pay for it, he wanted to selectively adopt some of the changes to the federal tax code that Trump signed into law in 2017. The changes, which would mostly impact businesses, would have brought the state an extra $1 billion.
But the legislature did not include the tax changes in its version of the budget proposal. Instead, lawmakers said they hope to reach a tax agreement outside of the budget process by July 1.