While the Affordable Care Act (extends health insurance to millions of Californians, not all will enroll. Between 3.1 and 4 million Californians may still lack health insurance in 2019. Many of the remaining uninsured will cite costs and affordability of coverage options as the primary reason for not enrolling. The cost of insurance has long been reported as a barrier to gaining coverage, and the ACA does not greatly reduce cost for all.
For some individuals and families eligible for Exchange plans or coverage through employers, the cost may be unaffordable, even after contributions from employers or federal tax credits. To expand coverage amongst groups who face affordability challenges, various third parties have expressed interest in offering additional premium assistance to lower the cost of obtaining coverage as well as cost-sharing assistance to decrease the out-of-pocket cost to enrollees when they seek care. Premium assistance has been used by numerous entities in the past to expand access to affordable coverage. Some organizations, such as public coverage programs, may have a financial interest in enrolling consumers in private plans, as it reduces cost and risk. Federal regulations allow some third parties to provide premium and cost-sharing assistance to Exchange enrollees, but the rules have been clouded with confusion until recent clarification by the Centers for Medicare and Medicaid Services.
This draft report outlines potential uses of premium and cost-sharing assistance by non-federal entities, including counties, the State, nonprofits and foundations, and employers. It identifies populations that may benefit from premium assistance as well as the limitations of offering financial assistance.