Earlier this month, the budget approved by California Governor Gavin Newsom and accompanying trailer bill language directs $82.5 million toward directly reducing health care deductibles and co-pays for Covered California participants.

Championed by Assemblymember Schiavo (D-Chatsworth), the funds make use of fines collected through the individual mandate penalty that were always intended to go toward reducing healthcare costs for low-income Californians.

When the individual mandate passed in 2019, the intent of the mandate was to protect the health and welfare of residents and ensure access to affordable health coverage. Unfortunately, in a survey conducted by the California Health Care Foundation in 2021, nearly half of respondents cited cost as a reason for skipping care in the prior year, with many of those who skipped care having their conditions worsen.

Further, a quarter experienced or knew a family member who had difficulty paying a medical bill. That percentage jumps to forty-three percent for low-income Californians.

“There are thousands of Californians who have health insurance but don’t have the financial security to be able to use it,” Assemblymember Schiavo said. “I was proud to champion this budget request, and I’m grateful to the Governor for ensuring that these funds will help low-income Californians seek preventative and timely care without fear of unaffordable deductibles or a budget breaking bill.”

According to Health Access California, the organization that has advocated for this change for years, $82.5 million would benefit an estimated 650,000 current Covered California enrollees. In addition to the funding for this year, the accompanying trailer bill allocates $165 million for 2025 and beyond to directly reduce out-of-pocket costs for low-income Californians.

“As Californians battle with rising cost-of-living, this major state budget investment ensures that hospital stays, doctor visits, and prescription drugs will remain affordable for hundreds of thousands of Californians,” said Diana Douglas, Policy and Legislative Director for Health Access California. “This is a great example of how policymakers, patient advocates, legislators and the Governor can come together to provide real relief for affordability and keep a promise to keep health care dollars in health care.”

With the federal Inflation Reduction Act capping rate increases at 8.5% of income and the new state cost-sharing reductions, Covered California plans will remain competitive and affordable.  For more information on 2024 rates and plans please visit the Covered CA website.