Health & Medicine

Did dropping tax penalty hurt Covered California enrollment? The numbers are in

Would this interpretive dance inspire you to get health insurance? Watch it now

Covered California commissioned this dance to depict how unexpected life events can leave people thankful for medical coverage. It kicked off this year’s open enrollment with a performance on Thursday, Nov. 8, 2018.
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Covered California commissioned this dance to depict how unexpected life events can leave people thankful for medical coverage. It kicked off this year’s open enrollment with a performance on Thursday, Nov. 8, 2018.

Despite the elimination of a tax penalty for those who forgo health insurance, enrollment in Covered California’s health plans remained at almost the same level as last year, with more than 1.5 million people signing up.

That may sound like good news, but Covered California executive director Peter V. Lee is concerned that his agency saw a 23.7 percent drop in the number of new consumers seeking coverage.

“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,” Lee said in a news release. “The federal removal of the individual (tax) mandate penalty appears to have had a substantial impact on the number of new consumers signing up for coverage.”

Covered California is the health insurance marketplace that the state put in place as part of the Affordable Care Act, and its mission is to negotiate and offer high-quality insurance plans to consumers at an affordable rate.

In total, Covered California signed up 1,513,883 consumers, compared with 1,521,524, a slight drop of 0.5 percent. The decline is lower than the agency had predicted. It estimated it would lose between 7 percent and 8 percent of insured.

But a surge in renewals from current enrollees helped to make up for the drop in new business. Renewals rose by 7.5 percent.

“The drop in new enrollment affirms the leadership Gov. Gavin Newsom has taken to propose an individual mandate and enhanced subsidies aimed at making coverage more affordable for Californians,” Lee said.

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