In a Facebook post, Oct. 20, 2020

A viral post claims that former President Barack Obama’s health insurance law penalized a family a large amount of money for not buying health insurance and that President Donald Trump was responsible for stopping the practice.

The post features writing on the back of a car windshield that says, “Because our family couldn’t afford health insurance, Obama/Biden penalized us about $10,000, then took that $10,000 and used it to pay for others’ free Obamacare. Trump ended that theft.”

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about .) We found a similar post on Instagram.

The post appears to refer to the penalty, a tax under the Affordable Care Act placed on those who chose not to get health insurance. At the end of 2017, Republican-backed tax legislation, also supported by Trump, zeroed out the fine. Beginning in 2019, people could no longer be penalized for not having health insurance. Thus, the mandate hasn’t been in effect for about two years.

But $10,000 — the hefty amount this family was supposedly penalized for not having health insurance — raised questions for us. And was that money really used to pay for other people’s health insurance? We decided to look into it.

The History of the Individual Mandate

The ACA was implemented in 2010 during the Obama administration. The aim of the health care law — often referred to as Obamacare — was to ensure everyone had health insurance.

To that end, the law used what health policy experts call a approach. For low-income and middle-income individuals who had difficulty affording health insurance, the government would provide tax subsidies to reduce the cost of insurance — that was the carrot. And to make sure everyone enrolled in a health insurance plan, those who didn’t sign up were fined, under what was known as the individual mandate provision. That was the stick.

The individual mandate, which didn’t kick in until 2014, was unpopular with the American public, according to polling at the time. A showed that 55% of Americans supported the idea of eliminating the requirement that everyone must have health insurance or pay a fine. (KHN is an editorially independent program of KFF.)

Although one of was to repeal and replace the ACA, efforts to do so failed in 2017 when the Republican-held Senate failed to get the votes it needed.

Instead, in their , Republicans set the penalty for the individual mandate to $0. Starting in 2019, Americans no longer had to pay a fine for not having health insurance. Trump signed the 2017 tax bill into law. So, it is true that Trump and congressional Republicans were responsible for neutralizing the penalty.

However, experts pointed out that the individual mandate is still in place, it’s just that the penalty is set to $0. In fact, the end of the penalty is behind the justification for a attempting to overturn the ACA, brought by Republican attorneys general and supported by the Trump administration. The plaintiffs argue that the health care law is no longer constitutional because the penalty no longer for the federal government. The Supreme Court will hear oral arguments on the case Nov. 10.

The Math

The viral social media posts claim that the family “couldn’t afford health insurance” and was penalized $10,000.

Health policy experts told us that while the social media post doesn’t give all the specifics needed to know if this was absolutely true, it seems unlikely a penalty would be this high.

One issue is the post doesn’t specify whether the $10,000 penalty was incurred in one year or over multiple years. It also doesn’t say how many individuals were part of the family.

Assuming the $10,000 penalty was incurred in one year, multiple experts told us that the family would have had an annual income above $400,000 and at least one person would have had to be uninsured for the entire year. That math is based on the penalty structure , the last year the mandate was enforced.

In 2018, the penalty was calculated one of two ways. The fine was the greater of the two results:

• $695 for an adult and $347.50 for a child, up to a max of $2,085 per family annually, or
• 2.5% of family income above a certain tax filing threshold ( the tax filing threshold was $10,650 for a single individual or $21,300 for joint filers in 2018).

The first way to calculate the penalty obviously doesn’t apply since the max was $2,085 per year. So, the second would be the only way to get a $10,000-a-year penalty. To arrive at such a number, you would have to take 2.5% of the family’s income. In this case, 2.5% of a $400,000 income gets you close to $10,000.

And experts said it is highly unlikely that a family with a $400,000 income would have had difficulty affording health insurance.

“So I would highly doubt the veracity of what is written on that car windshield,”, a senior fellow in health reform and private insurance at KFF wrote in an email. “People with that much income almost always have job-based health benefits and, if not, generally are inclined to insure themselves very well in order to protect assets — otherwise, if hospitalized and uninsured, they could owe many multiples of the penalty amount in medical bills.”

, a health policy professor at the University of North Carolina-Chapel Hill, also pointed out that a $10,000 penalty would have been rare.

“Very few American families would have paid anything close to that amount in penalty for not having insurance — the average penalty per person in 2017 was around $700,” Oberlander wrote in an email. “Moreover, only a small percentage of Americans ever paid the penalty for not having health insurance — in 2017, 4.6 million persons,” or about 1% of the population. (In 2017, 325 million people lived in the U.S., according to the .)

It’s also unclear whether it would have just been cheaper for the family to pay for health insurance rather than incur a $10,000 penalty, said , a health policy scholar at the Brookings Institution.

“It depends on the ages of the members of the family, where they live, what year (or years) we are talking about, and the family’s income,” Fiedler wrote in an email. “There are conceivable scenarios where the family could have found a bronze plan for $10k or less. But there are also plenty of plausible scenarios where they could not have. Without knowing more about the family’s circumstances, it’s just hard to say with any confidence.”

Where Did the Penalty Money Go?

Experts also told us that the post’s assertion that the penalties paid for not having health insurance were directly applied to fund other people’s health insurance was off the mark.

The individual mandate penalties were assessed during each annual tax filing, and then payments were made the year after there was a lapse in insurance coverage.

Those penalties were collected just like any other tax payment.

“As a strict accounting, keep in mind, everything gets dumped into the Treasury regardless of the source, and then it is appropriated out of the Treasury by Congress,” said , a senior research fellow in health care policy at the Heritage Foundation. “It’s not like money goes into one account and then another.”

So, while it’s certainly possible that the penalty money could have been used to help pay for some of the ACA subsidies for other people, the money also could have gone to any other number of things the government pays for, like the military, disaster relief or education.

“You don’t know exactly where your taxes or penalties go,” said , an assistant professor in economics at Emory University. “Maybe a small share went to Obamacare, but that’s a stretch. You can’t track where every dollar you spent on your taxes is going.”

It’s also misleading to say that other individuals received “free Obamacare” from the penalty payment. The experts said that while Medicaid expansion, which was a part of the ACA, does provide health care coverage for low-income people who are eligible, those who bought insurance on the marketplace would still likely have paid for some part of their coverage after subsidies were applied.

Our Ruling

A viral social media post claims that a family was penalized $10,000 for not being able to afford health insurance. It also claimed the penalty money was taken to pay for others’ “free ObamaCare” and Trump stopped that practice.

It is true that Trump and Congress did zero out the individual mandate requirement, so people could no longer be penalized for not having health insurance. But after that, skepticism abounds.

For instance, it’s very unlikely that a family would face a $10,000 penalty in one year. Moreover, if such a family did face this penalty for not having health insurance, they would likely be in a high-income bracket for which health insurance tends to come from an employer or be affordable. And the charge that the penalty was used to provide “free coverage” for others doesn’t fit with federal accounting processes.

Experts said, though, that the lack of specifics about this family’s situation makes it difficult to be completely definitive.

We rate this claim Mostly False.

SOURCES

Census Bureau, Ìýaccessed Oct. 27, 2020

The Commonwealth Fund, July 11, 2018

Email interview with , the Paul O’Neill Alcoa chair in policy analysis at Rand Corp., Oct. 23, 2020

Email interview with , professor of health policy and management at the University of North Carolina-Chapel Hill, Oct. 25, 2020

Email interview with , senior fellow in health reform and private insurance at KFF, Oct. 26-27, 2020

Email interview with , fellow with the USC Brookings-Schaeffer Initiative for Health Policy at the Brookings Institution, Oct. 26, 2020

of opinion, accessed Oct. 27, 2020

, accessed Oct. 27, 2020

IRS.gov, accessed Oct. 27, 2020

KFF, Sept. 1, 2020

KFF, Nov. 17, 2017

KFF, Nov. 15, 2017

LeadStories.com, Oct. 22, 2020

Phone interview with , Preston A. Wells Jr. senior research fellow at the Heritage Foundation, Oct. 23, 2020

Phone interview with , assistant professor in economics at Emory University, Oct. 23, 2020

PolitiFact, , July 15, 2020

Rand Corp., published in 2015

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At least it seemed that two of the three appeals court judges were during oral arguments in the case, , in July.

Trump administration health officials have said they will continue to enforce the health law pending a final ruling from the Supreme Court. But that is not a guarantee that President Donald Trump won’t change his mind. That’s what in canceling some payments to health insurers.

There’s no doubt that invalidating the ACA in whole or in large part would have a dramatic effect on the nation’s health system ― and not just for those 20 million or so Americans whose coverage directly flows from the law.

“Billions of dollars of private and public investment ― impacting every corner of the American health system ― have been made based on the existence of the ACA,” said a . Declaring the law null and void “would upend all of those settled expectations and throw healthcare markets, and 1/5 of the economy, into chaos,” they wrote.

And with health care continuing to be a top issue in the presidential campaign, both Democrats and Republicans could find themselves scrambling for a fast stopgap solution if the law were to suddenly go away.

First, Some Background

At issue in the ACA case is whether the language in the 2017 GOP tax bill reducing to zero the tax penalty imposed for failing to have health insurance should render the rest of the law invalid.

A group of Republican state attorneys general and governors say it should. They argued that without the tax, the Supreme Court’s justification for upholding the law in 2012 no longer exists and so the law is now unconstitutional. U.S. District Judge Reed O’Connor last December.

Supporters of the law ― including not just Democratic attorneys general, but also the Democratic-led U.S. House ― and bipartisan groups of legal and health policy scholars say that’s just nonsense, that the law not only can function without the individual mandate penalty but is functioning now.

What would go away ― meaning which provisions consumers have become accustomed to ― if the law is eventually struck down? Let’s take a look.

Insurance Protections

Most people think the health law directly affects only those Americans who purchase their own insurance through the exchanges the law created (and who get subsidies if their incomes are between 100% and 400% of the poverty level). That’s about 10 million to 12 million households.

But many of the insurance protections in the law also protect those who have insurance through their jobs. These provisions include allowing adult children to stay on their parents’ health plans and requiring that insurers cover people who have preexisting health conditions at no additional charge to those patients. The law also requires that ACA-compliant policies provide preventive care with no out-of-pocket cost, and bans annual and lifetime insurance coverage limits.

It also . That makes for a lot of chaos right there should the entire law disappear. But there is more.

Medicare And Medicaid

Most people with a passing familiarity with the health law know it expanded the Medicaid program for those with incomes up to 138% of the poverty level (at least in states that opted into the program).

The law also made big changes to the Medicare program, including closing the notorious “doughnut hole” that left some seniors with big drug bills despite having insurance. The ACA also extended coverage of more preventive benefits for people with Medicare coverage.

Generic Biologics

An important, though frequently overlooked, portion of the health law created the first legal framework and regulatory pathway for copies of expensive, already FDA-approved biologic drugs, called biosimilars, to reach the market. Biologic drugs are among the most expensive medications and treat life-threatening ailments such as cancer, rheumatoid arthritis and macular degeneration. It is unclear what would happen to the stream of biosimilars already approved if the law is struck down ― will their approvals be revoked? What about medications currently in the approval pipeline?

Funding For The Indian Health Service And Training More Health Professionals

Among other little-known features of the ACA is a provision that permanently authorized the U.S. Indian Health Service, which provides health coverage for more than . An overturn of the law could leave in doubt the legality of some of the program’s operations.

Here’s one more provision you may not have thought about. On the theory that if more people have health insurance more people will seek medical care, the ACA has an entire section devoted to increasing the supply of not just physicians, but nurses, therapists, dentists and community health centers. Many of these training programs could founder if the ACA is overturned.

And those now-ubiquitous on restaurant menus? Those are there because of the ACA. Some people may not be sad to see those go away. But if the ACA is invalidated, the health system will likely change in ways that no one can predict.

HealthBent, a regular feature of Kaiser Health News, offers insight and analysis of policies and politics from KHN’s chief Washington correspondent, Julie Rovner, who has covered health care for more than 30 years.

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But some of you need not worry: The law that will allow certain people to avoid the penalty, among them prisoners, low-income residents and those living abroad.

“It will be really important that people get clear guidance and instruction to make sure they don’t inadvertently pay a penalty when they are eligible for an exemption,” says , director of the Health Care Program at the University of California-Berkeley’s Center for Labor Research and Education.

California’s penalty is modeled on . Congress eliminated the federal penalty, effective this year.

The Golden State will join , in requiring their residents to have health coverage and dinging those without it.

Most types of insurance, including Medi-Cal, Medicare and employer-sponsored coverage, will satisfy California’s coverage requirement. People who purchase insurance for themselves and their families, either through Covered California, the state’s health insurance exchange, or the open market, will have until Jan. 31 to buy a health plan for 2020.

If you aren’t covered and owe a penalty for 2020, it will be due when you file your tax return in 2021. The will amount to $695 for an adult and half that much for dependent children. Some people with higher incomes instead will have to pay 2.5% of their income, which could make their penalty .

Penalty payments are expected to raise in the first year they are collected, according to the state Legislative Analyst’s Office. The money will help pay for intended to make insurance more affordable for some people.

You won’t have to pay the penalty if you are uninsured for three consecutive months or less during the year, or if you are incarcerated or are Native American. Likewise, if you are in the U.S. illegally.

General hardship exemptions also are available if you are facing personal or family difficulties, including homelessness, domestic violence, bankruptcy, eviction or the consequences of a natural disaster.

And you’re off the hook if your household income is below the threshold for filing a tax return. This was the most common exemption from the federal penalty, according to based on 2016 returns. It might be even more popular under the California law, since the state’s filing threshold is higher than the federal one, Lucia says.

You can also claim an exemption if you would have to spend more than 8.24% of your income on insurance premiums in 2020. This so-called affordability exemption was also among the most common under the federal law.

How you claim an exemption depends on the type you are seeking.

Covered California will handle three types of exemptions: religious conscience, general hardship and affordability. Each will require filling out a different application, and the applications will be available starting in January, says James Scullary, an exchange spokesman.

For other exemptions, you’ll need to apply when you file your 2020 return with the Franchise Tax Board in early 2021. A tax board spokeswoman promises that “our tax forms and instructions will include information for all exemptions claimed on the tax return.”

You can also apply to the tax board for an affordability exemption when you file your return.

Gerald Kominski,Ìýa senior fellow at the UCLA Center for Health Policy Research, says the 8.24% threshold to qualify for the affordability exemption is too high and pushes many middle-class families to pay a penalty even when they are hard-pressed to buy insurance.

Steven Morelock, a resident of Los Angeles, paid hundreds of dollars in federal penalties for several years because he felt too financially stressed to plunk down $250 a month for a high-deductible health plan. He was already shelling out nearly half of his $2,500-a-month salary in rent alone.

“I would have had to change my habits very dramatically,” says Morelock, 41, a labor organizer. “It would have cut the amount of money I had for non-fixed costs by about half.” He finally got employer-sponsored insurance late last year.

Another exemption that has stirred some debate is for membership in a ministry — an association of religiously like-minded people, primarily Christians, who cover one another’s medical costs.

Legislators and others who opposed including this exemption in California’s law argued that the ministries are subject to little regulatory scrutiny, the coverage they offer is limited, and it’s not guaranteed. More recently, concerns have arisen about sham ministries engaged in deceptive business practices.

Dr. Dave Weldon, president of the , acknowledges some of the limitations and says the organizations he represents “all counsel their members that this is not insurance, there’s no contract, there’s no obligation to pay.”

Bob Stedman, 55, says he and his family were exempt from the federal penalty every year because of their membership in Samaritan Ministries International. The Lake Forest, Calif., resident plans to take the same exemption under the California law.

Stedman figures he’s saving about $1,000 to $1,500 a month in premiums compared with regular insurance, and was pleased when the $50,000 bill he received following a stroke was heavily discounted by the hospital and then almost entirely covered by other ministry members. And knowing his money is not being used to finance abortions, which most commercial health plans in California are required to cover, gives him “the benefit of a clear conscience,” he says.

Weldon says the exemption is warranted on those grounds alone. “This nation has a long history of religious accommodation,” he says.

If you’re not sure whether you might qualify for an exemption, you can get more information from Covered California or the tax board.

Contact Covered California at or by phone: 800-300-1506. For the tax board, log on to or call 800-852-5711.

But don’t limit yourself to those two agencies. Insurance agents and tax preparers across the state are trying to master the details of the new law, and they can help.

For a list of insurance agents whose help is free, log on to the Covered California website and click on “find help” or go to the website of the National Association of Health Underwriters (www.nahu.org) and hit “find an agent.” The California Society of Tax Consultants () and the California Society of CPAs () can help you find a tax preparer.

This story was produced byÌý, which publishesÌý, an editorially independent service of theÌý.

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• Many people who have employer-based insurance and don’t get coverage from the ACA don’t realize that key protections they now enjoy come from that law. These include provisions such as allowing adult children to stay on their parents’ plan until age 26 and barring insurers from using annual coverage caps or lifetime limits.
• The legal challenge to the ACA by conservative states is a real threat to the law, but the case could still be resolved in a wide variety of ways. It is likely, however, to be appealed to the Supreme Court at some point.
• The Trump administration’s plan to revamp how kidney patients get care appears to have satisfied many different stakeholders and is being widely hailed — except by the two giant firms that profit from clinic-based kidney dialysis and the status quo.
• The administration this week had two setbacks on its efforts to slow the rise in prescription drug costs. A court, ruling on procedural grounds, set aside the government’s plan to require drugmakers to add prices to television ads. Also, the administration announced it is shelving its rule that consumers get some of the rebates from drugmakers that pharmacy benefit managers negotiate for insurers.
• The legal challenge to the administration’s rule that would restrict doctors and other health professionals who receive Title X federal family planning grants from referring women for an abortion has created chaos among those health care providers because the rules have been on and off again. But for groups supporting the right to an abortion, time is the name of the game. They hope to run out the clock and elect a different president in 2020.

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If the lower court ruling is ultimately upheld, the case, , has the potential to shake the nation’s entire health care system to its core. Not only would such a decision immediately affect the estimated 20 million people who get their health coverage through programs created under the law, ending the ACA would also create chaos in other parts of the health care system that were directly or indirectly changed under the law’s multitude of provisions, such as calorie counts on menus, a pathway for approval of generic copies of expensive biologic drugs and, perhaps most important politically, protections for people with preexisting conditions.

“Billions of dollars of private and public investment — impacting every corner of the American health system — have been made based on the existence of the ACA,” said a filed by a bipartisan group of economists and other health policy experts to the 5th Circuit Court of Appeals. Upholding the lower court’s ruling, the scholars added, “would upend all of those settled expectations and throw healthcare markets, and 1/5 of the economy, into chaos.”

Here are five important things to know about the case:

It was prompted by the tax bill Republicans passed in 2017.

The big tax cut bill passed by the GOP Congress in December 2017 included in the ACA for failure to maintain health insurance coverage. The lawsuit was filed in February 2018 by a group of Republican attorneys general and two governors. They argued that since the Supreme Court had upheld the ACA in 2012 specifically because it was a valid exercise of Congress’ taxing power, taking the tax away makes the entire rest of the law unconstitutional.

Last December, Judge Reed C. O’Connor agreed with the Republicans. “In some ways the question before the court involves the intent of both the 2010 and 2017 Congresses,” O’Connor wrote in his decision. “The former enacted the ACA. The latter sawed off the last leg it stood on.”

State and federal Democrats are defending the law.

Arguing that the rest of the law remains valid is a group of Democratic attorneys general, led by California’s Xavier Becerra.

“Our argument is simple,” said Becerra in a statement last Friday. “The health and wellbeing of nearly every American is at risk. Healthcare can mean the difference between life and death, financial stability and bankruptcy. Our families’ wellbeing should not be treated as a political football.”

The Democratic-led has also been granted “intervenor” status in the case.

The Trump administration has taken several positions on the lawsuit.

The defendant in the case is technically the Trump administration. Traditionally, an administration, even one that did not work to pass the law in question, defends existing law in court.

Not this time. And it is still unclear exactly what the administration’s position is on the lawsuit. “They have changed their position several times,” Sen. Chris Murphy (D-Conn.) told reporters on a conference call Monday.

When the administration first weighed in on the case, in June 2018, it said it believed that without the tax penalty only the provisions most closely connected to that penalty — including requiring insurers to sell policies to people with preexisting conditions — should be struck down. The rest of the law should stay, the Justice Department argued.

After O’Connor’s ruling, however, the administration changed its mind. In March, a spokeswoman for the Justice Department said it had “determined that the district court’s comprehensive opinion came to the correct conclusion and will support it on appeal.”

Now it appears the administration is shifting its opinion again. In a late last week, Justice Department attorneys argued that perhaps the health law should be invalidated only in the GOP states that are suing, rather than all states. It is unclear how that would work.

Legal scholars — including those who oppose the ACA — consider the case dubious.

In a brief filed with the appeals court, from both sides of the fight over the ACA agreed that the lawsuit’s underlying claim makes no sense.

In passing the tax bill that eliminated the ACA’s tax penalty but nothing else, Congress “made the judgment that it wanted the insurance reforms and the rest of the ACA to remain even in the absence of an enforceable insurance mandate,” wrote law professors Jonathan Adler, Nicholas Bagley, Abbe Gluck and Ilya Somin. Bagley and Gluck are supporters of the ACA; Adler and Somin have argued against it in earlier suits. “Congress itself — not a court — eliminated enforcement of the provision in question and left the rest of the statute standing. So congressional intent is clear.”

It could end up in front of the Supreme Court right in the middle of the 2020 election.

Depending on what happens at the appeals court level, the health law could be back in front of the Supreme Court — which has upheld the health law on other grounds in 2012 and 2015 — and land there in the middle of next year’s presidential campaign.

Democrats are already sharpening their rhetoric for that possibility.

“President Trump and Republicans are playing a very dangerous game with people’s lives,” Senate Minority Leader Chuck Schumer told reporters on a conference call Monday.

Murphy said he is most concerned that if the lower court ruling is upheld and the health law struck down, Republicans “won’t be able to come up with a plan” to put the health care system back together.

“Republicans tried to come up with a replacement plan for 10 years, and they couldn’t do it,” he said.

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If they were single, each would qualify for a federal tax credit to help reduce the cost of their health insurance premiums. As a married couple, they get zip.

“We talk about getting divorced every time we get our health care bills,” said Haas, 34, of Oakland, Calif. She has been married to her husband, Andrew Snyder, 33, for two years.

“We kind of feel like we messed up. We shouldn’t have gotten married.”

The couple pays about $900 in monthly premiums — which adds up to about 14% of their annual income, said Haas, a self-employed leadership coach and consultant. Snyder is an adjunct professor of ethnomusicology.

Under a by Gov. Gavin Newsom, an estimated 850,000 Californians could get help paying their premiums, including people like Haas and Snyder, who together make too much to qualify for federal financial aid but still have trouble affording coverage.

To pay for the health insurance tax credits, the Democratic governor is proposing a tax penalty on Californians who don’t have health insurance — similar to the unpopular federal the Republican-controlled Congress eliminated, effective this year.

If Newsom’s $295 million plan is enacted, California would be the first state to offer financial aid to middle-class families who have shouldered the full cost of premiums themselves, often well over $1,000 a month.

“This is a gap in the Affordable Care Act, but there’s been no action at the federal level,” said Matthew Fiedler, a fellow with the USC-Brookings Schaeffer Initiative for Health Policy.

Democrats in Congress introduced legislation to expand the federal subsidy to more people, but those efforts have stalled in the past in the face of Republican opposition.

In California, legislators are debating Newsom’s penalty and tax credit proposals as part of budget negotiations, which must be wrapped up by June 15. Democrats control the legislature, but Republicans and taxpayer groups are opposed to the proposed penalty, saying people should have a choice about whether to buy insurance.

“It’s a very costly and regressive tax on young people who can’t afford it,” said David Wolfe, legislative director of the Howard Jarvis Taxpayers Association. “They likely aren’t going to get sick, and they want to take that chance.”

Three other states — Massachusetts, New Jersey and Vermont — and the District of Columbia already have adopted state health insurance . Health experts say these mandates encourage young, healthy people to buy coverage alongside older, sicker — and more expensive — enrollees.

If lawmakers approve a state tax penalty, modeled after the now-defunct ACA mandate, some Californians could owe if they fail to buy insurance.

“Without the mandate, everybody’s premiums go up,” Newsom said at an event in Sacramento in early May. “Every single person in this state will experience an increase in their costs if we don’t have a diversified risk pool.”

Massachusetts and Vermont provide state financial aid to low-income people who qualify for federal aid under the ACA, the USC-Brookings Schaeffer Initiative for Health Policy. Newsom wants to go a step further and give financial help to middle-income earners — which could include families of four earning up to about $154,500.

Under his proposal, 75% of the financial aid would go to about 190,000 of these middle-income people who make between 400% and 600% of the federal poverty level. That’s between about $50,000 and $75,000 a year for an individual and between about $103,000 and $154,500 for a family of four.

The average household tax credit in this category would be $144 per month, according to .

The remaining money would go toward tax credits for about 660,000 people who earn between 200% and 400% of the federal poverty level, or roughly between $25,000 and $50,000 for an individual and $51,500 and $103,000 for a family of four. The average household tax credit in this category would be $13 a month, Covered California estimated.

Exactly how much Californians could receive would vary depending on where they live, their ages, incomes and family size, said Peter Lee, Covered California’s executive director.

For example, a couple, both 62, living in the San Francisco Bay Area making $72,000 a year doesn’t qualify for federal tax credits. They now pay a $2,414 monthly premium — or about 40% of their income.

That couple could qualify for a $1,613 state tax credit under Newsom’s proposal, lowering the cost of health insurance to about 13% of their income, according to a Covered California analysis.

By comparison, an affordable employer-sponsored health plan as one that costs about 9.5% or less of an employee’s household income.

California’s high premium costs are among the biggest concerns middle-income customers raise with Kevin Knauss, an insurance agent in the Sacramento region.

“I have clients, especially those who are self-employed, who have literally discussed the possibility of not working for two or three months or stepping back from projects” so they can earn less and qualify for federal tax credits, Knauss said.

Other insurance agents said they’ve met middle-income families who are willing to forgo insurance for one family member — often the breadwinner — to bring down costs.

Alma Beltran, a small-business owner in Chula Vista, Calif., doesn’t have health insurance, and neither do her husband and 17-year-old daughter.

Beltran knows it’s a risk but said the premiums this year were simply unaffordable: $1,260 a month for a plan with a whopping $13,000 deductible.

“I decided to let my business grow at the expense of my health insurance,” said Beltran, 53, who manufactures labels for the beer and wine industry. “This is the first year ever that I haven’t had health insurance.”

Such stories are why some lawmakers think Newsom’s proposal doesn’t go far enough. For instance, some households wouldn’t qualify for a state tax credit until they spent a quarter of their income on premiums.

“We’re still talking about a substantial portion of someone’s income,” said state Sen. Richard Pan (D-Sacramento). “I appreciate the governor’s leadership, but I think that we do need to more.”

The state Senate wants the governor to the funding to about $600 million, not only by relying on the penalty revenue but by dipping into the state general fund. California is projected to have a $21.5 billion budget surplus for budget year 2019-20.

While Newsom said he supports giving consumers larger subsidies, he said his plan is fiscally responsible because it has a dedicated revenue source from the proposed health insurance penalty.

“Perfect’s not on the menu, but better than any other state in America is,” Newsom said.

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Esta caída fue más pronunciada de lo esperado, y fue mayor que la de nuevos inscriptos en el mercado federal, cuidadodesalud.gov (healthcare.gov). Ocurrió incluso a pesar que Covered California, el mercado estatal de seguros de salud, para captar a nuevos beneficiarios durante el período de inscripción abierta que finalizó el 15 de enero.

En total, alrededor de 1,5 millones de californianos seleccionaron un plan de salud para la cobertura de 2019, una cifra similar a la del año pasado, informó la agencia. Pero la nueva inscripción se redujo en un 23.7%: 295.980 inscripciones, en comparación con 388.344 en 2018. A la vez, las renovaciones de planes se mantuvieron sólidas, con un aumento del 7.5%.

“Las acciones recientes a nivel federal parecen estar causando grandes caídas en la inscripción, lo que llevará a que haya más personas sin seguro y a primas más altas para todos los californianos”, dijo Peter Lee, director ejecutivo de Covered California.

“La eliminación del mandato individual y de la penalidad parecen haber tenido un impacto sustancial en la cantidad de nuevos consumidores que se inscribieron para tener cobertura”, agregó.

Según de los Centros de Servicios de Medicare y Medicaid (CMS), la nueva inscripción en el mercado federal de seguros de salud, el que utilizan 39 estados, cayó a 2.1 millones, un 15,8% menos que el año anterior.

La inscripción total fue de 8.4 millones, comparado con aproximadamente 8.7 millones en 2018.

La caída en la inscripción, especialmente si menos personas sanas se están inscribiendo, podría llevar a primas más altas, explicó David Panush, presidente de California Health Policy Strategies, una firma de consultoría con sede en Sacramento, y ex director de asuntos externos de Covered California.

“Cuando tienes menos personas saludables inscritas, eso tiene un efecto en el conjunto de riesgo (risk pool). “Y cuando tienes un grupo más enfermo, eso significa que las primas aumentan, aunque también lo hacen los subsidios”, dijo Panush. “Pero para las personas del lado no subsidiado, eso es un gran problema”.

De hecho, las tarifas de las primas ya han aumentado debido a la eliminación de la multa por no tener cobertura de salud, medida que entró en vigencia este año. Covered California dijo que el aumento de la tasa promedio para 2019 habría sido , en lugar del 8.7%, si no se hubiera eliminado la multa, como parte de la ley de impuestos que los republicanos aprobaron en 2017.

, el gobernador demócrata de California, Gavin Newsom, se expresó a favor de un mandato estatal, que requeriría que todos los californianos tuvieran cobertura de salud. La legislatura tendría que aprobarlo, lo cual no está garantizado ni siquiera con una mayoría demócrata porque el mandato individual fue una de las disposiciones menos populares de la Ley de Cuidado de Salud a Bajo Precio (ACA).

Penalizar a los californianos sin seguro de esta manera podría generar una recaudación de aproximadamente $500 millones al año, dijo Newsom cuando a principios de enero. Sugirió también que ese dinero podría usarse para crear subsidios estatales para los californianos que luchan por pagar un seguro de salud.

La nueva inscripción cayó a pesar que Covered California gastó $40 millones en anuncios durante el último período de inscripción abierta, parte de un monstruoso presupuesto de $107 millones para marketing. En comparación, el gobierno federal gastó $10 millones en publicidad.

Expertos dicen que la publicidad es importante, pero no funciona por sí sola. “Necesitas los tres componentes: asequibilidad, un mandato y publicidad”, dijo Panush.

Kevin Knauss, agente de seguros en Granite Bay, dijo que cree que la asequibilidad desempeñó el papel más importante en la reducción de nuevas inscripciones. Agregó que una economía fuerte significa que más personas tienen seguro de salud a través de sus trabajos, por lo que no necesitan comprar planes en el mercado.

“En mi experiencia, los precios altos son la principal razón por la que las personas no se registran, no es el fin de la multa”, dijo Knauss. “Dicen ‘no puedo hacerlo, no puedo costearlo'”.

Al mismo tiempo, Knauss dijo que casi que se esperaba una caída en la nueva inscripción, dada la evolución del mercado.

“Tenemos que recordar que el mercado está saturado: Covered California existe desde hace un tiempo, y las personas que quieren comprar probablemente ya tomaron esa decisión”, dijo.

Doreena Wong, directora de proyectos para Asian Americans Advancing Justice, una organización de derechos civiles, dijo que este año ha sido más difícil convencer a las personas para que se inscriban y renueven su cobertura.

El grupo, que forma parte de una colaboración estatal, recibe fondos de subvenciones de Covered California para alcanzar a la comunidad y para la inscripción, especialmente en las comunidades de inmigrantes y de bajos ingresos.

“Es difícil saber exactamente por qué, pero nosotros mismos hemos visto una baja de al menos un 10%”, dijo.

Wong culpa a la eliminación de la multa, junto con el temor que hay en las comunidades inmigrantes como las razones que explican la baja en el número de nuevas inscripciones.

Señaló el cambio propuesto al concepto de “carga pública”, que está a la espera de la acción final del Departamento de Seguridad Nacional. Este cambio permitiría al gobierno federal considerar el uso que hayan hecho inmigrantes legales de una lista ampliada de programas de beneficios públicos, incluidos Medicaid, cupones de alimentos y viviendas de la Sección 8, como una razón para negar la residencia permanente, también conocida como tarjeta verde (). Medicaid es el programa estatal y federal de salud para personas de bajos ingresos.

Aunque los subsidios para los planes comprados a través de Covered California no están incluidos en la lista de programas públicos que se considerarían, existe tanta confusión entre los inmigrantes que algunos optan por no inscribirse, dijo Wong.

“Las comunidades están experimentando muchos temores”, agregó. “Nosotros hemos recibido muchas llamadas por la nueva propuesta de carga pública”.

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The number of new enrollees in Covered California health plans plunged by nearly a quarter this year, largely because of the elimination of the federal tax penalty for people without insurance, officials announced Wednesday.

The decrease was steeper than expected — and larger than the drop in new enrollment in the federal marketplace, healthcare.gov. It occurred even as Covered California, the state health insurance exchange, spent to entice people to sign up for coverage during the open-enrollment period that ended Jan. 15.

Overall, about 1.5 million Californians selected a health plan for 2019 coverage, a figure similar to last year’s, the agency said. But new enrollment fell by 23.7 percent, with 295,980 sign-ups, compared with 388,344 last year. Meanwhile, plan renewals remained strong, posting a 7.5 percent increase.

“Recent actions at the federal level appear to be causing large drops in enrollment that will lead to more uninsured and higher premiums for all Californians,” said Covered California Executive Director Peter Lee.

“The federal removal of the individual mandate penalty appears to have had a substantial impact on the number of new consumers signing up for coverage,” he said.

New enrollment in the federal health insurance exchange, healthcare.gov, which serves 39 states, fell to 2.1 million, down 15.8 percent from the previous year, from the Centers for Medicare & Medicaid Services.

Total enrollment dropped to 8.4 million from roughly 8.7 million in 2018.Ìý

The drop in enrollment, especially if fewer healthy people are signing up, could lead to higher premiums, explained David Panush, president of California Health Policy Strategies, a Sacramento-based consulting firm, and former external affairs director for Covered California.

“When you have fewer healthy people enrolling, that has an effect on the risk pool. And when you have a sicker pool that means premiums go up, although so do subsidies,” Panush said. “But for people on the non-subsidized side, that’s a big deal.”

In fact, premium rates have already increased because of the elimination of the penalty for not having health coverage, which took effect this year. Covered California said the average rate increase for 2019 would have been — instead of 8.7 percent — if the individual mandate penalty hadn’t been axed as part of the 2017 Republican tax bill.

, California Democratic Gov. Gavin Newsom called for a state-based mandate, which would require all Californians to have health coverage. The legislature would have to approve it, which isn’t guaranteed even with a Democratic majority because the mandate was one of the least popular provisions of the Affordable Care Act.

Penalizing uninsured Californians in this way could raise roughly $500 million a year, Newsom said when he earlier this month. That money, he suggested, could be used to create state subsidies for Californians who struggle to afford health insurance.

New enrollment fell even though Covered California spent $40 million on ads during the latest open-enrollment period, out of a monster $107 million marketing budget. By comparison, the federal government spent $10 million on advertising.

While advertising is important, it alone doesn’t do the trick, experts say. “You need all three — affordability, a mandate and advertising,” Panush said.

Kevin Knauss, an insurance agent in Granite Bay, Calif., said he believes affordability played the biggest role in the drop in new enrollment. He added that a strong economy means that more people have job-based health insurance, and so they don’t need to buy plans on the open market.

“In my experience, high rates are the primary driver for people not signing up,” not the end of the penalty, Knauss said. “They say ‘I can’t do it, I can’t afford it.’”

At the same time, Knauss said the drop in new enrollment is almost expected, given the evolution of the market.

“We have to remember the market is saturated — Covered California has been around for a while, and people that want to buy have probably already made that decision,” he said.

Doreena Wong, a project director for Asian Americans Advancing Justice, a civil rights organization, said it was harder this year to persuade people to enroll and renew their coverage.

The group, part of a statewide collaborative, receives grant money from Covered California for outreach and enrollment, particularly in immigrant and low-income communities.

“It’s hard to know exactly why, but we have seen at least a 10 percent drop ourselves,” she said.

Wong blames the elimination of the penalty coupled with fear among immigrant communities as reasons for the decline in new enrollment.

She pointed to the proposed “public charge” rule change, which is awaiting final action by the U.S. Department of Homeland Security. The change would allow the federal government to consider legal immigrants’ use of an expanded list of public benefit programs, including Medicaid, food stamps and Section 8 housing, as a reason to deny lawful permanent residency — also known as having a . Medicaid is the state-federal health insurance program for low-income people.

Although federal tax credits for plans bought through Covered California are not included in the list of public programs that would be considered, there’s so much confusion among immigrants that some chose to skip enrolling in coverage, Wong said.

“There are fears that communities are experiencing,” she said. “The proposed public charge rule, for example — we’ve gotten a lot of calls about that.”

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The embraces a state health insurance mandate, beefed-up insurance subsidies, coverage for undocumented immigrants and six months of paid parental leave — not unexpected from a Democrat who campaigned on expanding health care and criticized President Donald Trump and congressional Republicans for eroding the Affordable Care Act.

The new governor declared his $209 billion state budget proposal, of which health care accounts for nearly 30 percent, “a reflection of our values.”

Newsom’s 2019-20 budget plan is just the starting point. He must negotiate with the legislature on a final budget by June 15 — so some of these proposals are certain to change or be eliminated.

“These are first-in-the-nation, new steps to provide new help for people to afford access and coverage,” said Anthony Wright, executive director of Health Access California. “That’s a good thing.”

Lee Ohanian, a senior fellow at the conservative Hoover Institution and an economics professor at the University of California-Los Angeles, countered that California would need to cut costs if it wants pay for Newsom’s initiatives.

“Newsom has a long list of very expensive things he would like to do,” Ohanian said. “He’s going to have to take money from something else.”

While the Democratic legislature is generally supportive of expanding health care coverage, there are both political and financial obstacles to the sweeping proposals that Newsom has laid out.

The governor’s plan to create subsidies for middle-class Californians, for example, relies on lawmakers approving a financial penalty on the uninsured, which was an unpopular provision in the Affordable Care Act. Newsom estimated the penalty would raise roughly $500 million a year.

The estimated subsidies would be modest. For an individual who earns between 250 and 400 percent of the federal poverty level — or between about $30,350 and $48,560 — the subsidies would average about $10 a month, said Newsom cabinet secretary Ana Matosantos. Although these Californians already qualify for a federal tax credit under the Affordable Care Act, many still can’t afford their insurance.

For individuals who make between 400 and 600 percent of the federal poverty level — or between about $48,560 and $72,840 — and therefore don’t qualify for federal tax credits, the state subsidy would come to about $70 a month on average, depending on location and premium costs, Matosantos said.

“It will certainly be a help to some people,” but doesn’t do a lot to address overall affordability, said Larry Levitt, a senior vice president at the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

Congress eliminated the for uninsured people, effective this year, as part of its 2017 tax bill. In response, New Jersey, Vermont and the District of Columbia have passed their own mandates in an effort to keep healthy enrollees from dumping coverage. A third state, Massachusetts, already had a state mandate.

Newsom argued during his budget briefing that, unlike the federal tax penalty, the California penalty would not be considered a tax and would only need a simple majority to win legislative approval.

“California does not need to go in the direction of the rest of the country,” he said.

Whether lawmakers will embrace the penalty is unclear, even though Democrats have supermajorities in both houses. California voters last year a Democratic state senator who voted for a gas tax increase.

Assembly Health Committee Chair Jim Wood acknowledged the vote could be “a difficult one.” ÌýThe Healdsburg Democrat, who is carrying a bill to create state-based subsidies, said he is hopeful his colleagues will consider all the governor’s health care proposals as a revenue-neutral package.

For example, that Newsom signed earlier this week that directs state agencies to work together to negotiate prescription drug prices could save the state hundreds of millions of dollars, Wood said. Those savings, along with the revenue from the health insurance penalty, could help pay for subsidies, or for coverage under Medi-Cal for unauthorized immigrant young adults, he said.

“It’s kind of a three-dimensional chess game right now in trying to put all these things together,” Wood said.

Lawmakers last year considered extending full Medi-Cal benefits to both young adults and seniors who are in the country illegally. But the proposals were dropped during budget negotiations, in part because former Gov. Jerry Brown balked at the cost.

Medi-Cal is California’s version of the federal Medicaid program.

Newsom’s budget includes $260 million to pay for Medi-Cal for undocumented immigrant adults ages 19 to 25. California already coversÌýall kids up to age 19, regardless of their immigration status. Newsom described the expansion as the right thing to do from both a moral and a financial standpoint.

U.S. Sen. Bill Cassidy (R-La.) on Tuesday announced he would introduce legislation in Congress prohibiting California from using federal dollars to provide Medi-Cal to undocumented immigrants. However, Newsom’s budget would use state dollars to pay for the expansion, just as state funds pay for undocumented children’s coverage. Cassidy’s spokesman did not return an email seeking comment.

Among the health-related proposals that still need more vetting is Newsom’s plan to expand the state’s program from six weeks to six months.

Details were scarce, and the governor said a task force is studying how to pay for it — whether through increased taxes on employers or using general fund dollars. That too could be a sticking point among lawmakers.

“I am a big proponent of parents spending time with newborn children,” said Assemblyman Jay Obernolte, the ranking Republican on the Assembly Budget Committee. “However, I am absolutely opposed to forcing employers to do that.”

Newsom’s budget also includes several other health-related initiatives, including:

• $25 million to improve the detection and treatment of early psychosis, which includes symptoms such as hallucinations and disorganized thoughts and behaviors.
• $10 million to provide clean water, including bottled or hauled water, to communities during emergencies.
• $100 million for programs that coordinate health and social services and help provide housing for people with mental illness.
• $60 million to increase developmental screenings for children at 9, 18 and 30 months of age.
• $342.3 million to restore recent cuts in the In-Home Supportive Services program, which provides in-home care and transportation to low-income older people or those with disabilities.

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Ñî¹óåú´«Ã½Ò•îl Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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The study, published Monday in the journal Health Affairs, stems from a 2017 survey in which researchers at Harvard University Medical School and Massachusetts General Hospital asked more than 3,000 Californians who had bought individual health care plans: “Would you have purchased health insurance coverage this year if there was no penalty?”

Nineteen percent said they would not have, and a disproportionately large number of those were in population groups most likely to be uninsured before the law took effect.

“Especially for lower-income consumers who are potentially eligible for subsidies, it’s really important to try to understand how eliminating the penalty might affect their choices,” said Vicki Fung, lead author of the study and an assistant professor of medicine at Harvard Medical School.

The federal penalty for not having health coverage disappeared Jan. 1, following the decision by the Republican-controlled Congress to reduce it to zero in the 2017 tax reform package. While it was in effect, the penalty potentiallyÌý — though the ACA allowed numerous exemptions from coverage based on financial hardship and other personal circumstances.

The researchers behind the Health Affairs study estimated that if the people who said they would drop insurance in the absence of a penalty had not been enrolled in a health plan, premiums would have been 4 to 7 percentÌýhigher that year. Covered California, the state’s Obamacare exchange, that the elimination of the penalty added nearly 4 percentage points to its average 2019 premium.

The study concluded that other states could be harder hit than California by the elimination of the penalty. Premium increases of the magnitude they estimated for the Golden State are unlikely to destabilize its individual insurance market, they said.

Covered California has spent hundreds of millions of dollars promoting its health plans to consumers — more than the federal government spends for the 39 states that use the federal exchange.

Still, the loss of coverage caused by ending the tax penalty could fall heavily on many Californians, the study suggests.

About 31 percent of Hispanics responding to the survey said they would not buy health insurance if it were not required, compared with 13 percent of whites,ÌýFung said. (Hispanics can be of any race.)

About 22 percent of people without chronic conditions said they would not have bought insurance if there were no penalty, compared with 12 percent of those with two or more chronic illnesses, according to the study. And more than twice as many men aged 18 to 30 said they would have dropped coverage than among those 51 and older.

The percentage of health plan enrollees who said they would skip coverage in the absence of the penalty was also higher among those with lower income and education levels.

The study’s findings largely echo what other policy analysts have found. But most of their studies have involved statistical models, rather than direct surveys of consumers, Fung said.

A University of California-Berkeley released in November projected that between 150,000 and 450,000 fewer Californians would enroll in coverage in 2020 without the penalty. An estimated that repealing the penalty would induce 4 million people nationally to forgo coverage this year, and 13 million inÌý2027.

About 1.3 million Californians bought health insurance through Covered California in 2018. A vast majority of them qualified for federal tax credits that lower their premiums, and about 44 percent also got subsidies to reduce what they pay out-of-pocket when they seek care.

The Health Affairs study “really underscores the need for state policies to protect the gains we’ve made and to continue progress toward universal coverage, such as state-level individual mandates and subsidies to buy coverage,” said Laurel Lucia, director of the health care programÌýat the UC-Berkeley LaborÌýCenter and one of the authors of the UC-Berkeley study.

Legislative proposals last year to create state-based financial aid for purchasing insurance failed, but their proponents have for some of their ideas under California’s new Democratic governor, Gavin Newsom.

This story was produced byÌý, which publishesÌý, an editorially independent service of theÌý.

Ñî¹óåú´«Ã½Ò•îl Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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