affordable care act – Page 2 – Public Policy Institute of California

Immigrants and Health Insurance

California has made major strides in reducing the number of state residents without health insurance coverage. With the state’s Medicaid expansion and the creation of Covered California under the Affordable Care Act (ACA), the percentage of Californians without insurance dropped nearly 5 percentage points in 2014—the first year of ACA implementation. Declines occurred across all racial and ethnic groups, with Latinos registering the largest drop at 9 percentage points. Nevertheless, Latinos continue to experience the highest uninsured rate, in part because the ACA coverage expansions exclude California’s estimated 2.7 million undocumented immigrants.

But there is more to the story of insurance coverage and California’s immigrants: we also observe large declines in the uninsured rate among all noncitizens, a group that includes an estimated 2.6 million people who are legally residing in the state (with green cards, temporary visas, work visas, etc.), as well as those who are undocumented. When we look at uninsured rates across different citizenship categories, we see the drop was larger among noncitizens than among US-born and naturalized citizens—noncitizens had nearly a nine percentage point decline in their uninsured rate.

Noncitizens who legally reside in the state have access to ACA coverage expansions either through the Medi-Cal program—if their household income is below 138 percent of the federal poverty level, about $33,500 for a family of four—or through Covered California, with financial assistance available to help pay for coverage. Still, about 35% of California’s more than five million noncitizen residents currently lack comprehensive health insurance coverage—most are likely to be undocumented, with limited sources for affordable insurance coverage.

Undocumented residents sometimes have private health insurance, most often through their employers. National estimates suggest between 30–40% of undocumented immigrants have coverage. This number could grow if federal immigration reforms are implemented, by providing undocumented immigrants who qualify (between 1.1 and 1.3 million in California) with work permits and better job opportunities that could offer increased access to employment-based insurance.

Along with pending federal action on immigration reform, state legislative proposals are also focusing on expanding affordable insurance coverage options to the undocumented. In our new report, we discuss these potential options and provide new regional estimates of the undocumented population in California by income thresholds to assist policymakers in planning for potential coverage expansions to this group.

Video: Health Coverage & Undocumented Immigrants

Legislative efforts, executive decisions, and public opinion all suggest interest in expanding health coverage to California’s undocumented immigrants. The state’s decision to provide Medi-Cal benefits to undocumented children reflects that support. But the vast majority of undocumented residents in California are adults, and they make up a sizable share of residents without health insurance.

A new PPIC report finds that half of California’s undocumented immigrants—about 1.4 million—have incomes low enough to qualify for full Medi-Cal benefits should legislative proposals to offer coverage be enacted.

This week at a briefing in Sacramento, PPIC research associates Shannon McConville and Iwunze Ugo presented their report, which includes estimates of the number of undocumented immigrants across family income levels and the Covered California insurance regions. These estimates can help policymakers plan for the increase in Medi-Cal participants if coverage is expanded—which will depend on the legislature, governor, and federal courts.

Big Declines in Number of Uninsured Californians

Nearly 2 million more Californians had health insurance coverage in 2014 than in 2013, according to newly released US Census data. Still, about 4.7 million Californians reported they were uninsured in 2014.

The percentage of Californians without health insurance coverage dropped nearly 5 points in the first year the Affordable Care Act (ACA) was implemented—from 17.2% to 12.4%. Declines were even more dramatic among adults age 18 to 64, who benefited the most from the ACA coverage expansions. Among this group, uninsurance rates declined nearly 7 percentage points—from about 24% in 2013 to about 17.3% in 2014.

Declines in uninsurance rates occurred across all racial/ethnic groups, with the largest drops among Latinos (6.5% overall and 9.2% adults age 18 to 64), followed by African Americans (5.7% overall and 8.1% adults age 18 to 64) and Asian Americans (4.9% overall and 6.7% adults age 18 to 64). Despite coverage gains, Latinos continue to have the highest proportion of residents without health insurance, with about 28% of adults age 18 to 64 reporting no coverage.

Changes in uninsurance rates also varied across California counties. The largest declines were in parts of the Central Valley and Monterey County, where the percentage of residents without insurance dropped by more than 6%. The counties that experienced the largest declines include Stanislaus (8.5%), Monterey (6.7%), and Merced (6.4%). Los Angeles County, home to the largest number of residents without health insurance in the state, had more than half a million fewer residents reporting they were uninsured in 2014 than in 2013. Generally, counties with higher shares of uninsured residents in 2013 experienced the largest declines.

California experienced one of the largest declines in the proportion of residents without health insurance coverage across the nation. But the percentage of Californians who remain uninsured is still above the national average – and continues to be higher than in several states that have not expanded their Medicaid programs.

Chart Source (TOP): American Community Survey, One Year Files for 2014 and 2015 accessed at American Factfinder.

Chart Notes (TOP): Individuals are considered to be uninsured if they do not have coverage at the time of the survey. The uninsurance rates presented do not account for the margin of error associated with the estimates. For the state estimates by race the margin of errors range from about 0.1% – 0.5%. The margins of error are larger for the county-level estimates and are larger for counties with smaller populations.

Emergency Room Use and the ACA

With millions of Californians gaining health insurance as a result of the Affordable Care Act (ACA), there is concern about whether the state’s healthcare delivery systems—particularly hospital emergency departments (EDs)—will be able to absorb the additional patients.

These concerns are understandable. EDs are a critical access point to health care for all Californians—and, because they are required to serve patients regardless of insurance status or ability to pay, EDs are particularly important for uninsured and publicly insured residents.

Before implementation of the ACA, the uninsured relied on EDs for care more than those with private insurance but less than Medi-Cal beneficiaries. This was largely because uninsured patients are often billed for the services they receive, while Medi-Cal beneficiaries have either nominal or no financial responsibility for ED visits. Medi-Cal has grown significantly under the ACA—in 2014, monthly enrollment increased by 40 percent to cover more than 12 million Californians.

Newly released state data provides a first glimpse of ED usage under the ACA. While ED usage may shift in the future, these first-year figures suggest there has not yet been a dramatic change statewide. Total ED visits and visits that did not result in a hospital admission did increase in 2014. However, this growth was in line with the upward trend over the past decade.

The proportion of ED visits involving moderate and low urgency continued its recent downward trend in 2014. And there was no discernable change in the proportion of ED visits that required patients to be admitted to the hospital.

The ACA’s impact on the use of health services and health care delivery systems will be the subject of considerable research and a focus for policymakers over the next several years. It will be important to continue to carefully monitor and assess health care use, particularly across different hospitals, regions, and patient groups to ensure that hospital systems throughout California are functioning well and residents have access to the services they need.

SOURCE: California Office of Statewide Hospital Planning and Development, Hospital Annual Utilization Data.

NOTE: The 2014 data is from the preliminary datafile. Figures include information from 292 hospitals that had data available in all years, which represent about 90 percent of all ED visits reported. The urgency or severity level of ED visits that did not result in a hospital admission is based on Current Procedural Terminology (CPT) codes. Low urgency is defined as visits categorized as minor and low/moderate (CPT codes 99281 and 99282). Moderate urgency is defined as visits categorized with CPT code 99283 and high urgency includes visits categorized as severe with and without threat (CPT codes 99284 and 99285).

Focus on Medi-Cal Funding

The legislature is currently in a special session to address Medi-Cal financing issues. The governor called the session to deal with his proposal to restructure the tax on managed care organizations—which currently generates about $1 billion in federal funding for Medi-Cal—so that it meets federal guidelines. In addition to complying with federal requirements, the governor’s proposed changes to the managed care tax will also provide revenue to increase payment rates for providers of services to the developmentally disabled and undo cuts to the In-Home Supportive Services (IHSS) program. In the absence of these changes, the state could face a $1.3 billion shortfall in Medi-Cal financing.

Regardless of the outcome of this special session, the state faces the challenge of establishing a stable and sustainable state funding base for Medi-Cal, which now covers nearly one-third of the state population. Since Medi-Cal expanded under the Affordable Care Act (ACA) less than two years ago, enrollment has increased by nearly 40 percent, and about 12 million Californians are now covered. Nearly all new enrollees are in Medi-Cal managed care, which has also grown considerably over the past few years. The federal government is providing most of the financing for Medi-Cal expansion, but there is uncertainty about state costs in future years.

Enrollment growth has increased the total costs of the program, which are expected to be more than $90 billion in the 2015–16 budget year—an increase of nearly 50 percent from the 2013–14 fiscal year, which included the first six months of the ACA’s Medi-Cal expansion. More than two-thirds of this increase has been funded by the federal government, which pays 100 percent of the costs of those who became newly eligible for Medi-Cal during the first three years of the ACA.

But the state will assume responsibility for 5 percent of costs for the newly eligible in 2017, and this share will gradually increase to 10 percent in 2020 and thereafter. Based on cost estimates for the newly eligible from the current state budget, this amounts to an additional $700M in 2017 and $1.4B in 2020. And this estimate doesn’t account for any increases in health care costs.

While state General Fund spending for Medi-Cal has grown relatively modestly since the ACA expansion, there are additional sources of uncertainty about future state costs for Medi-Cal, including (but probably not limited to):

Pressure to increase Medi-Cal provider rates, which are among the lowest in the country.
The legal status of President Obama’s executive order allowing many undocumented immigrants to get health coverage and the number of immigrants who could become eligible for full Medi-Cal benefits—which would be financed entirely by the state.
The effect of changes to state financing for county indigent care (under AB 85), which is expected to offset some of the state costs of the Medi-Cal expansion.
Ongoing negotiations with the federal government over the renewal of California’s 1115 Medicaid waiver. These waivers are designed to give states more flexibility to expand and improve their Medicaid programs. Over the past five years, California’s waiver brought in about $10 billion in federal funding to support Medi-Cal and the state public hospital system.
Planned reductions in federal funding from the Disproportionate Share Hospital (DSH) program, which provides additional funds for California hospitals that serve large shares of uninsured and publicly insured Californians. The lion’s share of DSH funds in California go to public hospital systems—an important source of specialty and inpatient care for Medi-Cal beneficiaries.
Required expansions to behavioral health benefits, including mental health treatment and substance use disorder services.
The high cost of new drugs—most notably for the treatment of Hepatitis C. Nationally, prevalence rates of Hepatitis C are higher among low-income men, who are among those most affected by ACA changes in Medi-Cal eligibility.

Long a complex issue, Medi-Cal financing has been complicated even more in recent years by the ACA, which affects all aspects of California’s evolving health care delivery system. But it will be important for the state to meet the challenge of developing a sustainable funding plan for this program, which provides for comprehensive health services for nearly a third of state’s population.

Sources: Medi-Cal enrollment totals are from the Department of Health Care Services, Research and Analytic Studies Division, Medical Certified Eligibles, Summary Pivot Table, Most Recent 24 months, May 2015. Medi-Cal funding sources are from the Medi-Cal Local Assistance Estimates, May 2014 and May 2015.

Health Insurance for the Undocumented

California continues to have at least 3 million uninsured residents, even after the coverage gains from the Affordable Care Act (ACA). Estimates suggest that between 1 million and 1.5 million of them are undocumented immigrants who are not eligible for federally subsidized coverage.

But there may be two opportunities for California’s undocumented population to gain access to coverage – depending on the legislature, governor, and courts. We estimate that as many as half of the state’s undocumented immigrants have incomes that are low enough to qualify for Medi-Cal coverage—with some variation across regions. To qualify for Medi-Cal, household income must be below 138% of the federal poverty level (about $16,000 for a single person or about $28,000 for a family of 3). Those with higher incomes may gain access to insurance through a state exchange.

First, the governor’s recently released proposal for the state budget includes funding to provide full Medi-Cal coverage to low-income undocumented immigrants who register for the federal Deferred Action for Parental Accountability (DAPA) program, which offers protected status to undocumented immigrants who have resided continuously in the U.S. for the past five years and are parents of children who are either U.S. citizens or legal permanent residents. This proposal is dependent on DAPA surviving current legal challenges.

Second, the Senate Appropriations Committee has approved state legislation that proposes to expand insurance coverage options to undocumented immigrants not eligible for DAPA. The bill (SB 4) would extend Medi-Cal to low-income undocumented immigrants under age 19. The number of adults who are eligible would depend on the state budget. The bill also includes provisions to allow those with higher incomes to purchase coverage through a state-based insurance exchange.

How many undocumented immigrants might be affected by these actions? Estimating the number is not straightforward. To help in the policy and planning process, we have recently updated our county estimates of undocumented immigrants for 2013 using zip code level tax records (filed with Individual Taxpayer Identification Numbers, or ITINs) and the analytic methods we have used in past work. We extend our earlier analysis to estimate how many undocumented immigrants might be eligible for insurance coverage based on family income for the pricing regions used by Covered California. To do this, we rely on information available from tax filings—we estimate income levels from adjusted gross income groupings and family size from tax filing status and the use of the federal child tax credit. PPIC expects to publish more results based on these analyses in the near future.

Statewide, our preliminary estimates indicate that just over half of undocumented immigrants (51%) are likely to be under the 138% poverty threshold used for Medi-Cal income eligibility. This share varies widely across regions. Nearly 60% in Los Angeles County and the Central Valley have incomes below the 138% threshold. Most Bay Area counties have lower shares below this threshold—from 36% in Santa Clara County to 44% in Contra Costa County. These findings are generally consistent with other work that uses different methods to profile California’s undocumented immigrants (MPI (2014), Marcelli and Pastor (2014), Warren (2015)).

We also estimate shares, by region, of undocumented immigrants that fall between 138% and 400% of the federal poverty level, the income range used by Covered California for its current enrollees to receive premium subsidies. Across most regions, between 40% and 60% of the undocumented population falls within this range, potentially making them eligible to purchase coverage through a state insurance marketplace.

Finally, about 85,000 undocumented have incomes above 400% of the federal poverty level – with most residing either in Bay Area counties or the coastal Southern California counties of Orange and San Diego.

Regional differences in health plans, provider capacity, and insurance costs make information on the size and distribution of the state’s undocumented population by income level crucial to planning effectively for coverage expansions. We expect to contribute regularly to the discussion as these planning efforts unfold.

Table source: Author’s analysis of tax data.
Table note: Counts are rounded to the nearest 500 and may not add to the statewide total as a result. Regions correspond to the insurance pricing regions used by Covered California, with one exception. Region 15 in the table includes all of Los Angeles County.

Half a Million New Enrollees in Covered California

The 2015 enrollment period for Covered California is wrapping up, and the state appears to have exceeded its forecast of 500,000 new enrollees. According to the most recent available data, more than 495,000 people signed up for private plans through the exchange during open enrollment, and another 93,000 signed up during a special enrollment period from February to April 30. Among those who enrolled before February 22, approximately 88 percent were eligible for federal subsidies to help pay for premiums. In addition, more than 780,000 people enrolled in Medi-Cal, bringing total Medi-Cal enrollment to slightly more than 12 million.

In addition to working to increase total enrollment, the state prioritized outreach to the Latino and under-35 populations during the second open enrollment period. Among subsidized enrollees, the share that are Latino rose from 31 percent to 37 percent, and the share that are under 35 rose from 29 percent to 34 percent.

Peter Lee, Covered California’s executive director, had announced the special enrollment period for uninsured Californians who were surprised to learn that there’s a tax penalty for remaining uninsured. Residents who didn’t have health coverage in 2014 owed $95, or 1 percent of their income (whichever is higher). Those who are uninsured in 2015 face a higher penalty: $325, or 2 percent of income.

The special enrollment period resulted from a discussion about the misalignment of the Covered California enrollment period and the April 15 deadline for filing taxes. Many Californians were unaware of the tax penalty for being uninsured in 2014 until after the February open enrollment deadline. This year’s special enrollment period allowed people who were still unaware of the tax penalty to avoid paying it in 2015—more than 33,000 of those who signed up during this period indicated that they were unaware of the tax penalty.

Even though the 2015 open enrollment period is over, there are pathways for some individuals to obtain healthcare through Covered California or Medi-Cal. For example, individuals may sign up for or change private plans within 60 days of a “life-changing event” such as getting married or having a baby. And Californians who are eligible for Medi-Cal can enroll year-round.

Looking forward, the state will continue to face the challenge of ensuring access to providers for Medi-Cal recipients. California’s reimbursement rate for providers is among the lowest in the nation, leading many doctors to turn away Medi-Cal patients. Several bills have been proposed in the state assembly and senate to raise these rates. AB 366, which would prohibit the application of existing reductions to reimbursement rates, has moved into appropriations after unanimously passing the health committee. We’ll be tracking its progress throughout the term.

Video: Briefing Focuses on Health and Nutrition Safety Net for Children

More than half of all California children participate in at least one health or nutrition program designed to help low-income residents, according to a newly released PPIC report. At a briefing in Sacramento on Friday, PPIC research fellow Laurel Beck described the report, Enrollment in Health and Nutrition Safety Programs among California’s Children, that she co-wrote with PPIC senior fellow Caroline Danielson and research associate Shannon McConville.

Beck said that increased resources to administer assistance programs had raised enrollment in the programs—Medi-Cal, CalFresh, free and reduced-price school lunches, and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). As of 2012, nearly all low-income children up to age four were enrolled in at least one of these programs. But the researchers found significant variation across programs and counties. They concluded that better coordination could further the state’s goal of full enrollment of eligible children.

Undocumented Immigrants and Health Care

On the heels of President Obama’s recent executive actions on immigration, state senator Ricardo Lara has reintroduced legislation (SB 4) to provide access to affordable health coverage and care to all Californians, regardless of immigration status. The details of SB 4 have not been spelled out, but Senator Lara’s previous bill called for the state to offer the coverage available under the Affordable Care Act (ACA) to undocumented immigrants: Medi-Cal coverage to those below 138% of the federal poverty level (annual income of about $16,000 for a single person) and subsidies to purchase coverage to individuals earning up to 400% of the poverty level (about $46,700 annually).

As PPIC pointed out in a recent blog post, while the ACA excludes undocumented immigrants from the coverage expansions, President Obama’s executive order could pave the way for immigrants in California who are eligible for the Deferred Action for Parental Accountability program (and who meet income eligibility requirements) to get Medi-Cal coverage. Under current Medi-Cal eligibility rules, immigrants with deferred action status—meaning that their presence is known to the government and there are no plans to deport them—can receive full coverage under a benefit category known as PRUCOL (Persons Residing Under Color of Law). Some states, including California and New York, provide full Medicaid coverage for the PRUCOL group. This coverage is financed entirely by the states—the federal government funds only emergency medical treatment for undocumented immigrants.

The president’s action could also have implications for county programs that are required by state law to provide medical care to indigent residents. Currently, counties have considerable latitude in determining eligibility criteria for their indigent care programs, and many exclude undocumented immigrants. When state officials decided to expand Medi-Cal eligibility under the ACA, they reduced the funding provided to county indigent care programs because many of the people served by these programs would become eligible for Medi-Cal. The legislation (AB 85) that redirected state funds for county health programs included a provision to review this funding shift if there was federal action on immigration reform, but it’s not clear if that will happen in this case.

What is clear is that options for providing access to insurance coverage and health care for the more than 2.5 million undocumented immigrants in the state is a policy topic under consideration by policymakers at local and state levels.

Health Care Reform in California: An Update

Beginning tomorrow, many Californians will be able to enroll in or switch health insurance plans through the state’s insurance exchange, Covered California. In its first six months, Covered California enrolled 1.1 million people in private insurance plans and 2.2 million in Medi-Cal. This year the goal is to further expand enrollment and reduce the number of uninsured in the state. The open enrollment period will last for three months, although people will have to enroll in private plans by December 15 for coverage to kick in on January 1, 2015, and those who are eligible for Medi-Cal can enroll year-round.

What has happened so far?

California was one of the first states to implement the Affordable Care Act and set up its own exchange. Although there were some bumps along the way, the rollout was relatively smooth, and enrollment numbers were strong.

Of the 1.1 million people who enrolled in private insurance plans, approximately 88% were eligible for federal subsidies to offset their out-of-pocket costs.

What’s different this year?

In 2015, insurers and policymakers are hoping to enroll a large number of the estimated 3-5 million California residents with no insurance. A recent survey estimated that 30% of the remaining uninsured are undocumented immigrants, who are ineligible for ACA coverage.

Covered California is trying to make enrollment easier by increasing staffing and hiring more workers who speak more than one language.

Covered California monthly premiums will increase modestly—by around 4.2 percent, on average. Some premiums may increase by more than that, and some plans may become less expensive.

The tax penalty for uninsured individuals will be considerably higher:
- In 2014, the penalty was 1.0% of household income or $95 per adult and $47.50 per child, whichever is greater.
- In 2015, it will be 2.0% of household income or $325 per adult and $162.50 per child, whichever is greater.

Small businesses (with fewer than 50 employees) will be able to offer plans in two tiers through the Small Business Health Options Program (SHOP); they can also offer separate adult dental plans.

The tax penalty for firms with 50 to 100 employees that do not offer insurance coverage has been delayed until 2016.

What to look for in the months ahead?

Covered California is expecting to enroll around 500,000 people of all ages in private plans over the next few months. Policymakers are eager to enroll young adults (under 35) in insurance plans, because they are likely to be healthy, which will help keep premiums low and encourage insurers to enter the marketplace. Covered California has also allocated more than $100 million for Latino outreach.

There is currently a backlog of Medi-Cal applications waiting for approval from the Department of Health Care Services. A big influx of new enrollees could create longer wait times. Department officials are working to improve the system that processes applications; to clear the backlog, it will begin granting temporary approval to applicants younger than 19 to speed up their enrollment.

The U.S. Supreme Court will hear a challenge to the Affordable Care Act’s federal subsidy provisions next year. Because California does not participate in the federal insurance marketplace, it will not be directly affected by the court’s decision. But there could be significant implications for the program as a whole.

The Kaiser Family Foundation is a reliable source of information about enrollment specifics.