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California budget: health insurance for undocumented residents

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California just passed a budget deal that expands health coverage to some undocumented young-adult residents, making it the first state to do so.

The plan will provide Medicaid coverage to approximately 90,000 undocumented residents between ages 19 and 25, at a cost of about $98 million, according to a budget report. It also helps some US citizens with higher incomes afford health coverage.

The deal was passed overwhelmingly by the State Assembly and Senate. Democrats dominate both chambers. Governor Gavin Newsom, also a Democrat, released the budget proposal on June 6 after months of negotiation with the legislature. Newsom hasn’t yet signed the budget.

Undocument immigrants who are children are already covered under Medi-Cal, California’s insurance plan for people with low incomes.

To help pay for the plan, the budget includes a fine for people who don’t buy health insurance — a policy known as the “individual mandate”. The requirement that people buy health insurance or pay a fine was included in the federal Affordable Care Act, passed in 2010. It was removed from the health law by the Republican tax-overhaul bill passed at the end of 2017.

Newsom has said the penalty will partially fund the coverage expansions and will help keep insurance prices down. Republicans argued it is unfair to penalize those who do not wish to buy insurance, while rewarding those who are in the country illegally.

Another important provision of the budget expands the availability of subsidies that help people who buy health insurance on their own. The premium assistance is linked to income and how many people are in a household.

Around 850,000 additional Californians will receive subsidies to help them buy health insurance starting next year, according to Kaiser Health News.

People earning up to six times the federal poverty line — that’s roughly $150,000 for a family of four — will be eligible. That’s an increase from the existing assistance provided under the ACA, which goes to people who earn up to four times the poverty level.

The budget deal should provide a modest boost for companies that offer health insurance coverage on California’s insurance marketplace and in the state’s Medicaid program. Companies that stand to benefit include Centene, Anthem, and Molina Healthcare, according to Scott Fidel, an analyst at Stephens.

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