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New sign-ups for California’s insurance marketplace fall

January 30, 2019

SACRAMENTO, Calif. (AP) — New sign-ups for California’s health insurance marketplace dropped by 25 percent in 2019 compared to the prior year, state officials announced Wednesday.

In total about 1.5 million California residents purchased health care through the marketplace for 2019. About 1.2 million people renewed plans, a roughly 7.5 percent jump. But the number of new enrollees fell from 388,000 to 296,000.

That drop may be due to the 2017 decision by Republicans in Congress to eliminate a requirement that everyone buy health insurance or face a fine, said Peter Lee, executive director for Covered California.

“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.

Covered California sells health plans to people who don’t get coverage from an employer, Medicare or Medicaid. It was established under former President Barack Obama’s health care law. The individual mandate was a key piece of that law. The goal of the mandate was to ensure health insurance pools had a mix of healthy and sick people, helping keep premiums lower across the board.

The elimination of the mandate caused some insurers to raise premiums. The Trump administration has also reduced spending on marketing campaigns aimed at encouraging people to sign up.

Gov. Gavin Newsom has proposed restoring the mandate in California. Massachusetts, New Jersey and Vermont already have state insurance mandates. Newsom, a Democrat, also wants to expand subsidies to buy health insurance to middle-class families who don’t have them.

Lee applauded Newsom’s approach.

“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,” he said.

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