By Deepa Bharath

With Sammy Caiola, Sophia Bollag, Michael Finch and Yesenia Amaro

Eduardo Contreras thought he would finally see some financial security this year. For some time, his family had struggled on an income of about $50,000. Then Contreras got a new job as a cook at a winery, with better pay and more hours. In 2019, he and his wife, a hotel housekeeper, expect to clear $80,000. With an increase in family income of more than 50 percent, they looked forward to some relief from the pressure.

But then the 46-year-old Orange County resident took a look at his new monthly health insurance premium: $1,045, an increase of almost $700. That’s partly because his wife, who hasn’t been covered before, has been ill and needs insurance. They've been able to appeal to Covered California, the state’s insurance exchange for those without employer-sponsored coverage, to get the premium down to about $951 after a subsidy. So far they have been paying the monthly bill, but Contreras fears it may become unaffordable for his family.

Their two sons, ages 22 and 17, are covered separately through Medi-Cal, California’s Medicaid program.

Between rent, car payments, his older son's college costs and other expenses, Contreras said he has no idea how he'll pay the premiums every month. Neither he nor his wife has employer-provided health care plans. As legal residents, they are entitled to buy insurance through Covered California, but that doesn’t do them much good if they can’t continue to pay the premium.

"It feels like I'm caught in a vicious cycle," he said. "All your life you work hard to make more money. But when you make more money, that becomes a problem."

New legislation could help ease their situation.

There are 22 bills before the Legislature this year that aim to make health care more affordable and accessible. It seems almost certain that some of them will pass. But even though all the bills are heading in the same direction, there are competing visions of what a health care expansion should look like in 2019.

In January, Gov. Gavin Newsom unveiled his proposals, which are now embodied in various pieces of legislation. They include imposing an individual mandate that would penalize people for not carrying insurance; this would replace the federal mandate that was repealed when Congress enacted tax reform.

As proposed, the money generated by the penalty would be used to make insurance premiums more affordable for middle-income earners like the Contreras family. Newsom also wants to extend Medi-Cal coverage to immigrant adults under age 26 with very low incomes, but who are undocumented and thus not entitled to health insurance under the Affordable Care Act.

Meanwhile, some legislators have introduced bills with much more sweeping expansions. One major proposal contained in two bills this year would extent Medi-Cal eligibility to all undocumented adults whose incomes are low enough to qualify.

Noe Paramo, a legislative advocate with the California Rural Legal Assistance Foundation and a member of the Care4All California coalition, said making all Californians eligible for Medi-Cal, regardless of immigration status, will keep the state healthier in the long run. It would be a profound change for his clients, he said, especially farmworkers.

“Every day they go to work without health care, and any injury that happens to them, or just illness, they suffer a consequence,” he said. “We can do better as Californians. We need to support this.”

The concept of single-payer — one government health plan for all Californians — isn’t on the table, though Newsom has said numerous times he wants to move the state in that direction.

But everything has a price tag. And while Newsom is eager to improve health programs, Department of Finance spokesperson H.D. Palmer points out that the state has historically had to scale back ambitious health care agendas when funding evaporated, such as during the 2008 recession or the dot-com bust in 2000.

"The governor is mindful that we don’t want to get into kind of a yo-yo pattern between expanding programs and having to cut those back, which is why he’s been very careful in terms of expanding programs in health care in the ways that he has," Palmer said.

Dr. Anjali Mahoney, regional medical director for AltaMed, in Huntington Beach on Wednesday, February 6, 2019. Mahoney said about 20 percent of the patients who visit the clinic don't have health insurance.Mindy Schauer, Orange County Register / SCNG

Not everyone is a fan of the state’s ambition to expand coverage. Sally Pipes, president of the conservative Pacific Research Institute in California, criticized the legislative effort.

"For me, it's very, very worrying," she said. "These moves are, in my mind, stepping stones to a government takeover of heath care."

Debate on the bills is expected to center on priorities — expanding coverage to the largest possible number of undocumented adults or making plans more affordable to the middle class, said Assemblyman Jim Wood, D-Santa Rosa, who chairs the Assembly Health Committee. Newsom’s vision has some of both, but hews more to helping the middle class, a vision embodied in a bill carried by Wood.

"In an ideal world, we shouldn't have to choose because both groups are struggling," he said. "In the end, it's going to come down to the will of the Legislature and the resources that are available."

Wood’s legislation, Assembly Bill 174, would establish a tax credit beginning in 2020 for individuals earning between 400 and 600 percent of the federal poverty level who buy insurance on the state’s Covered California exchange. Senate Bill 65, introduced by Sen. Richard Pan, D-Sacramento, also strives to make plans in the marketplace cheaper by putting limits on how much consumers have to contribute to their premiums and by subsidizing copayments and deductibles between 200 and 400 percent of the poverty level.

For a family of two, 400 percent of the federal poverty level amounts to a household income of $65,840, or $100,400 for a family of four. That means if a family of two makes more than $65,840, they won’t qualify for subsidies when they purchase a plan through Covered California.

With an income for two of $80,000, the Contrerases wouldn’t qualify for the subsidies under the proposed legislation — but they could get a significant tax break to help them with their insurance bills.

If proposals to help all undocumented adults prevail, but not those that would help the middle class, the family would be stuck with their higher new premiums.

But Teresa Nava’s life in Orange County would change for the better.

Nava, 51, who has been living in the country illegally since 1995, depends on low-cost clinics for most medical needs. She also has emergency Medi-Cal, which is limited to sudden or unexpected serious health issues that require immediate attention.

"For so many years, I've been going from clinic to clinic to take care of my health," Nava said. "If I could get Medi-Cal, that would be such a big relief for me."

Nava, a housekeeper, arrived from Mexico in 1995. Her four children are now 28, 20, 19 and 14. They have health insurance through Medi-Cal or their employers.

Daniel Zingale, the governor’s chief strategist, said that giving Nava her wish of full Medi-Cal coverage would be an expensive proposition.

"Covering all undocumented uninsured individuals is estimated to cost about $3 billion (annually)," he said. Given the need for fiscal prudence, he said, the governor's proposals are steps toward that goal.

Dr. Anjali Mahoney, regional medical director for AltaMed, chats with patient Teressa Silver, 60, at the Huntington Beach office on Wednesday, February 6, 2019. About 20 percent of the patients who visit this clinic are uninsured, Mahoney said.Mindy Schauer, Orange County Register / SCNG

California has about 3 million uninsured residents, a figure that includes those who have emergency Medi-Cal for limited uses, according to 2017 U.S. Census numbers and statistics provided by the UC Berkeley Labor Center. That number is down dramatically from the 17 percent who were uninsured in 2013. Much of this drop has been attributed to Medi-Cal expansion under the Affordable Care Act. About 13 million people are covered by the program for very low-income people.

There are a few ways in which the state can pay for expanding coverage, said Scott Graves, director of research for the nonpartisan California Budget and Policy Center. Policy makers could use revenue from the general fund without a tax increase, just as they did when they expanded Medi-Cal to undocumented children in 2016.

Or, they could go to revenue sources that generally rise over time, such as a personal income tax, a sales tax or a corporation tax. Revenue sources that decline over time, such as tobacco taxes, are less effective at funding ongoing costs, he said.

According to the Legislative Analyst's Office, the general fund can absorb about $3 billion in new ongoing spending before shortfalls arise. The budget the governor has proposed in January includes $2.7 billion in that category.

Both Zingale and Wood believe that even though forces seem aligned this year for meaningful health care legislation to pass, it's going to have to be done in baby steps.

Wood is not optimistic about single-payer health care in the near future.

“Until we have a federal administration willing to work with us, single-payer health care is impossible to accomplish," Wood said.

This project results from an innovative reporting venture – the USC Center for Health Journalism News Collaborative – which involves print and broadcast outlets across California, all reporting together on the state’s uninsured.

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