The California Assembly approved a bill on Tuesday that would permit up to 390,000 illegal aliens to buy Covered California health insurance.
Under federal law, undocumented immigrants are barred from any of the financial subsidies available from the Patient Protection and Affordable Care Act, also known as Obamacare. But Sacramento Democrats voted as a bloc to expand the program to an estimated 390,000 illegal immigrants that earn too much income too high to qualify for Medi-Cal.
Senate Bill 10 directs the State of California to request the federal government to issue a waiver permitting “undocumented immigrants” the right to buy insurance on the Covered California insurance exchange with their own money.
Although the “undocumented immigrants” would not directly be eligible for subsidies, families with some legal immigrant members could consolidate coverage under a Covered California policy with undocumented family members.
The bill created blow-back from “We the People Rising,” a group that advocates for strict enforcement of immigration laws. Executive Director Robin Hvidston told the Los Angeles Times: “We oppose that [bill] because that encourages illegal immigration.” She added, “It sends a message to the world that if you come to our country you will be rewarded.”
The legislature had already passed a law that expanded Covered California to permit 170,000 undocumented children as of May 1 to be eligible for Obamacare subsidies at a cost of about $132 million per year.
Although the illegal alien adults would have to pay for coverage, expansions of Obamacare policies always come with what insurance actuaries call “adverse selection.” Because Obamacare does not require a physical or health history, the only illegal aliens who will join the program know they have much higher medical costs than the premium rates they will be changed.
That may partly explain why the nation’s largest health insurance company, United Healthcare, announced on the same day the legislature passed Senate Bill 10 that they were dumping Obamacare participation in California.
California’s health insurance exchange has estimated that its 2017 Obamacare premiums are expected to rise 8 percent on average for 2017 — about four times the current rate of inflation.
Senate Bill 10 must go back to the Senate for final approval before it goes to Governor Jerry Brown’s desk. If Brown signs the bill, it will be sent to the Obama administration’s Department of Health and Human Services and Department of Treasury. They will have up to 225 days to make an up-or-down decision.