A few weeks ago I noted that, thanks to California Governor Gavin Newsom and the Democratically-controlled state legislature finally reaching a compromise agreement on how to allocate ~$330 million/year in revenue generated by the state's individual mandate penalty, around $83 million will be utilized to dramatically reduce out of pocket expenses for hundreds of thousands of ACA exchange enrollees.
The bottom line is that this funding was intended to go towards reducing health insurance premiums for ACA exchange enrollees via Covered California as supplemental subsidies to be added on top of federal ACA tax credits...but the passage of the American Rescue Plan and the subsequent Inflation Reduction Act kind of made that moot, since the federal subsidies were made more generous than what the state subsidies would have been anyway.
As a result, Gov. Newsom decided that the extra revenue should go into the general state fund, while Democrats on the state legislature wanted to redirect it to eliminate deductibles and other types of cost sharing for ACA enrollees instead. This led to an impasse for the past several months:
This post has a long intro, but please bear with me...
Back in 2018, after the then-Republican controlled Congress zeroed out the ACA's federal "individual mandate penalty" (officially the "shared responsibility penalty"), I posted both a video and slideshow explainer about what this penalty was and why it was included in the ACA in the first place.
They also estimate that another 1.8 million uninsured Americans who are eligible for subsidized ACA exchange plans who would be eligible for Medicaid instead if those state actually did expand Medicaid (and perhaps another 100K in Missouri). That's nearly 4.0 million total...
So, how to crack this nut in these holdout states, all of which are either completely or partially controlled by Republicans who have adamantly refused to expand the program no matter what all these years?
As I (and others) have written many times, closing the so-called "Medicaid Gap" is one of the trickiest challenges President Biden and Congressional Democrats face when it comes to strengthening and improving the Affordable Care Act.
Once again: Under the ACA, all Americans earning up to 138% of the Federal Poverty Level (FPL)... roughly $17,700/year for a single adult or around $36,500 for a family of four...were supposed to be eligible to join Medicaid regardless of their health status, whether they had kids and so forth.
This was supposed to be the case in all 50 states and the District of Columbia (I'm not sure about Puerto Rico or the other U.S. territories...many ACA provisions never applied to them in the first place).
Unfortunately, one of the major consequences of the NFIB vs. Sebelius Supreme Court Case in 2012 was that expansion of the Medicaid program has to be voluntary on the part of each state.
