California has fined the uninsured since 2020, a requirement that was eliminated federally in 2017. In the first three years with the fine in place, the state has raised an estimated $1.1 billion, with $700 million more expected in the next two years.
In return for instituting the fine in 2020, state lawmakers requested that Newsom allocate the funds toward financial assistance for individuals enrolled in an ACA plan with high out-of-pocket costs.
According to the LA Times, Mr. Newsom’s proposed upcoming budget would instead move the funding to the state’s general fund.
“Money from the mandate should stay in healthcare,” state Senate President Pro Tem Toni Atkins told KFF Health News. “I don’t know what we’re waiting for. We’ve got to figure out a way to make healthcare more accessible, and there’s no question that the cost of health insurance is a barrier.
According to the report, Mr. Newsom has argued that federal ACA subsidies extended in 2022 help offset the cost of monthly premiums, and the state cannot afford to spend the money as originally intended because of a projected $32 billion budget deficit.
Lawmakers’ deadline to pass a budget bill is June 15.
