California’s New Governor Starts Off Day 1 With Health Care

Paul Kitagaki Jr/Sacramento Bee via ZUMA

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Gavin Newsom is officially the governor of California now, and he started off his first day by proposing what the LA Times calls a “sweeping” set of health care proposals. Fortunately, this isn’t really a good description. They’re actually fairly modest proposals that move California in the right direction without reopening the single-payer debacle of a couple of years ago. Here’s a quick summary:

  • Restores the individual mandate. This is fine, and it’s something a few other states have done too. It costs nothing, and should make Obamacare’s funding in California more stable.
  • Expands Medicaid to cover undocumented residents up to age 26. We already cover them up to age 19, so this is not a budget buster.
  • Consolidates all prescription drug purchasing into a single agency. In theory this should give the state more leverage to negotiate lower drug prices, but I’m a little skeptical that it will work. In any case, whether it saves money or not, it certainly won’t cost anything.
  • Sent a letter to the Trump administration asking for waivers that would allow California to adopt a single-payer plan in the future. This will accomplish nothing since there’s no chance the waivers will be granted as long as Trump is in office.

And finally the single most important proposal:

  • Extends Obamacare’s subsidies to include more middle-class families. Currently, subsidies phase out at $48,000 for individuals, $83,000 for a family of three, and $100,000 for a family of four. Newsom would extend these limits to $73,000, $125,000, and $150,000.
     
    Newsom has proposed a budget of $500 million to cover these increased subsidies, which amounts to roughly a 7 percent increase from current levels. That’s not enough to fund a very big subsidy for middle-class workers, but it’s a start.

Newsom tags his entire proposal at $760 million, nearly all of which is for the increased subsidies and the additional coverage for undocumented residents. It’s a sizeable sum, but not a huge one by California standards. The big question, of course, is what else Newsom has on his plate and how much it will add up to. We’ll probably find out pretty soon.

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