Asm. Wood Introduces Bill to Improve Affordability of ACA Plans

Thursday, February 20, 2020

SACRAMENTO--This week, Assemblymember Jim Wood (D-Santa Rosa) introduced AB 2347, legislation to reduce the cost of health care coverage for millions of Californians who purchase their coverage through Covered California, California’s health care exchange for the Affordable Care Act (ACA).

“California has an ongoing commitment to build on the success of the Affordable Care Act, but also recognizes that in a high-cost-of-living state like ours, we must do more to make premiums more affordable and to make plans with lower copays and deductibles attainable for more consumers,” said Wood. “My focus this year is on making coverage more affordable and identifying effective ways to contain health care costs and AB 2347 addresses the affordability issue.”

Last year, the state increased subsidies for many Californians, but did not provide increased support for individuals earning between $17,237 and $24,980 (138% and 200% of the federal poverty level (FPL)) or for those who face barriers accessing coverage because of high deductibles, co-pays or other out-of-pocket costs. The state also left in place the maximum percentages of income Californians must pay for coverage, depending on their income, ranging from 2% for those in the lower-income bracket to up to 18% for those earning less than $74,940. This bill will lower those maximums across the board.

“Right now, a person earning $49,960 may have to pay almost 10% or $5,000 every year for premiums, and that doesn’t include co-pays or deductibles,” said Wood. “This bill will provide subsidies that will lower those percentage maximums.”

AB 2347 provides additional assistance to individuals earning between $24,980 and $49,960, and families of four earning between $51,500 and $103,000, struggling to find a plan with affordable deductibles and co-pays. Approximately four of every 10 consumers in these income brackets are choosing Bronze level plans in Covered California with deductibles of $7,000 or more per year.

“It’s unreasonable to expect that people in this income bracket have $7,000 set aside for out-of-pocket health care costs,” said Wood. “This bill will provide cost-sharing-reduction subsidies that will zero out the deductible for that income bracket and allow them to choose a policy that works best for them and not be forced to pick the cheapest possible plan with the highest deductible because that’s all they can afford.”

This effort is being supported in the Senate with SB 65, a bill by Senator Richard Pan (D-Sacramento), chair of Senate Health Committee.

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