Quote of the Day:
California's lawmakers never seem to run out of ill-advised, unsustainable ideas for spending their constituents' tax dollars. Someday, they will run out of other people's money.
California Governor Gavin Newsom is expected to sign momentarily a new budget that will expand Medi-Cal, California’s Medicaid program to include illegal immigrants up to the age of 26.
Illegals through the age of 18 are covered already. The new age limit will be one more magnet drawing people to risk their lives (and those of their children) to come to the U.S. illegally.
An estimate has the expansion drawing an additional 90,000 people, with a price tag of $98 million a year. As Sally Pipes points out, that figure is dubious.
More will likely make the journey for the “free” health care. Once the process begins, the calls for opening Medi-Cal to all, regardless of age or immigration status, are inevitable. Indeed, a state Assembly bill has just passed that would accomplish that for a mere $3 billion annually.
So who gets to pick up the tab?
You already know the answer: Ordinary California taxpayers.
This will be accomplished, as Pipes explains, through an individual mandate (sound familiar?):
The budget is banking on an individual mandate to cover the cost of enrolling undocumented young people in Medi-Cal, among other things. Anyone who doesn't buy insurance would have to pay a penalty of $695 or 2 percent of their household income, whichever figure is larger. The state projects that the mandate will bring in over $1 billion over three years.
That mandate "penalty" is really a tax on those who don't qualify for subsidized coverage through the insurance exchanges. The federal government offers income-based subsidies that become progressively less generous as a person's income approaches 400 percent of the federal poverty line. California's new state budget offers additional subsidies for those who make up to 600 percent of poverty, or $75,000 a year for an individual.
The benchmark individual market plan in California has premiums of more than $5,000 a year. Annual deductibles can run several thousand dollars more. Even relatively well-off Californians may find those costs too steep, especially given the high cost of living in the Golden State.
These folks may have to decide between buying an insurance plan that costs upwards of $7,000 before coverage kicks in — or a couple thousand dollars in new taxes. All to underwrite coverage for people who are not in the state legally.
Reimbursement is less for Medi-Cal that other forms of insurance—hence doctors are reluctant to take Medi-Cal patients. About half California’s doctors took these patients in 2013. Legal residents of the state will be competing with illegal residents for the limited number of slots, making health care more difficult to obtain.
The system will be more unsustainable as Californians, unwilling to pay for services that do not benefit them, seek less expensive places to live, joining the more than 1.2 million who departed for other states between 2006 and 2017.
So, as Pipes suggests, the Golden State may run out of other people's money sooner rather than later.