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The 2019-20 Budget: The Governor’s Individual Health Insurance Market Affordability Proposals

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featured graphic for California State Legislative Analyst's Office

The Legislative Analyst’s Office has just published the following report: The 2019-20 Budget: The Governor’s Individual Health Insurance Market Affordability Proposals.

This report provides our assessment of the Governor’s proposals to (1) create a state requirement that most Californians purchase health insurance coverage (referred to as an “individual mandate”) or pay a financial penalty and (2) use the revenues from this penalty to fund additional health insurance subsidies for households purchasing coverage through Covered California.

While the full extent of the impact of a state individual mandate is uncertain, it may be one of the state’s most effective policy options to increase enrollment in the individual market and reduce the cost of individual market coverage, particularly for households that do not currently receive federal insurance subsidies. The proposed individual mandate does involve some trade-offs, but on balance we think the Governor’s proposal warrants serious consideration.

We think it makes sense to consider the individual mandate proposal in the context of other policies that would improve the affordability of coverage, as proposed by the Governor. We suggest that the Legislature consider the Governor’s subsidy proposal in the context of various policy options available to promote this goal. The report discusses key decision points for the Legislature as it evaluates these options. The report also provides initial comments on issues that could come up related to the implementation of such policies.

This report is available using the following link: https://lao.ca.gov/Publications/Report/3927.

This article was released by the Legislative Analyst’s Office.

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