I’m just going to put this right here: the state government of California is crazy. If California happened to be a person, then his or her relatives could make a case for institutionalization, or at least heavy medication and a conservatorship.
Recently, the state Assembly has passed laws that will create a Ministry of Truth (they get to tell you what is fake news and what isn’t), mandated water usage that will require state residents to choose between doing laundry or taking a shower some days, outlawed gasoline powered cars starting in 2040, and now, they’ve banned affordable health insurance plans.
Back on August 21, the legislature passed SB 910 which is a ban on bargain-priced short-term health insurance plans sponsored by the Trump administration. These short-term plans range in duration from three months to 364 days. The Trump Administration also allowed insurers the right to offer short-term health plans that are automatically renewable up to 3 years.
The Obama Administration restricted this short-term insurance precisely to eliminate any kind of competition in the market for those overblown, bloated insurance plans that you might as well not have because once you’ve paid the $700/month premium, you still have a $6,500 deductible!
The bill’s sponsor, Senator Edward Hernandez, said the purpose of the bill was to prevent “junk” healthcare. You see, it’s all about protecting the consumer, right? Guess again.
These short-term plans, according to the Heritage Foundation, ““offer broader choices of providers and lower premiums for people in good health than Obamacare policies.” These short-term policies were “offering a lifeboat enabling them to escape Obamacare’s sinking ship.”
This is a real problem for California. Why? Because the state of California created its own exchange, Covered California, and everyone who doesn’t get employer-provided health insurance is forced to use the exchange.
Covered California announced in July that the cost of health coverage for 2019 would rise by 8.7%. While that rise is still 4 times more than the 2 percent US inflation rate in 2017, it’s still lower than the 12.5% rise that California saw in 2018. In other words, because of some new competition, and the fact that the individual mandate probably won’t get enforced any time soon, the increase is less than expected.
Some studies are showing that the expected rise in health insurance premiums for 2019 will be around 4% for individual plans, which is a lot lower than we have experienced over the last several years. Why? Because we now have more choices.
Someone living in Southern California purchasing a mid-level Silver policy on Covered California’s exchange would pay about $400/month. That compares to the advertised price for a short-term policy of $91 per month.
Currently there are only about 10,000 Californians that are enrolled in 90-day short-term healthcare plans, according to the San Francisco Chronicle. But with the Trump administration ending the “individual mandate” penalty for failing to buy health insurance equivalent to Obamacare, the number enrolling in short-term policies may spike higher.
Yes. That makes sense. People generally tend to act rationally when it comes to economic decisions. Wouldn’t you rather pay $91/month for short-term coverages (that you can renew) versus $400/month? I know I would.
And so, the state Assembly passed SB 910 to limit your ability to act rationally when it comes to handling your money and living your life. Oh, and Governor Jerry “Moonbeam” Brown did sign this into law on 5 September.
This is the state that is trying to influence Texas’ Senate race. You see, Beto O’Rourke (heretofore referred to as “Beta O’Dork”) wants to adopt some of the same policies here in Texas. Limits on gun ownership? Check. California did that several years ago. Limit the use of fossil fuels, despite trying to substitute with crap renewable sources? Check. Forcing you to pay more for a product you may or may not be able to use, like health insurance? Check. Beta wants to expand to Medicare for all.
Let California be California. But let’s keep them out of Texas.
Sandra PetersonFollow me on Twitter @janevonmises
Photo by Getty Images