Coverage Expansions and the Remaining Uninsured: A Look at California During Year One of ACA Implementation

Under the ACA, millions of individuals have gained coverage through new provisions, effective as of January 2014, to expand Medicaid and provide premium tax credits for coverage purchased through Health Insurance Marketplaces. In California, coverage gains were substantial, with 2.7 million people gaining Medi-Cal coverage and nearly 1.7 million people determined eligible for enrollment through Covered California between October 2013 and September 2014.¹ California is a bellwether state for understanding the impact of the ACA. The state’s sheer size and its high rate of uninsured prior to ACA implementation means that its experience in implementing the ACA has implications for national coverage goals. In addition, California was an early and enthusiastic adopter of the ACA; the state implemented an early Medicaid expansion through its Low-Income Health Program (LIHP) and was the first to create a state-based Marketplace.

While much attention has been paid to enrollment in new coverage options and changes in the uninsured over the past year, less is known about how this coverage has affected people’s lives. To help fill this gap, the Kaiser Family Foundation is conducting a series of comprehensive surveys of the low and moderate-income population. This report uses the California sample of the 2014 Kaiser Survey of Low-Income Americans and the ACA, funded by the Blue Shield of California Foundation, to examine Californian adults that gained coverage and remained uninsured in 2014. It also provides information on how the newly insured view their coverage and any problems they have encountered in using their coverage; how the remaining uninsured and newly insured fare with respect to access to medical care and financial burden; and why people in California continue to lack coverage and their plans for obtaining coverage in 2015. Additional detail on the survey methods is available online.

Background: ACA Implementation in California

Leading up to full implementation of the ACA and during the first year of major coverage expansions, California actively pursued opportunities to expand coverage for residents, conducted outreach and enrollment to bring people into new coverage options, and organized systems to deliver care. The state’s 2010 “Bridge to Reform” §1115 Medicaid Demonstration Waiver included early expansion of Medicaid in most counties through the Low-Income Health Program (LIHP), and in 2014, Medi-Cal coverage was expanded statewide to low-income citizens and legal immigrants. As of 2014, middle-income residents are eligible for premium subsidies to purchase coverage through Covered California. The state took steps to simplify and streamline enrollment such as automatically transitioning individuals from LIHP to Medi-Cal, creating a single online portal for Covered California and Medi-Cal applications, and adopting the Express Lane Enrollment Project to target adults and children enrolled in California’s Supplemental Nutrition Assistance Program. The state also invested heavily in outreach and enrollment efforts for both Medi-Cal and Covered California. These included statewide marketing campaigns, community mobilization and targeted efforts to reach vulnerable populations.

Despite all these efforts, the state—like all states—experienced outreach and enrollment challenges in 2014. Organizations and individuals in California cited a shortage of in-person assisters, problems with cultural and linguistic resources, technological issues with the Covered California website, and a Medi-Cal backlog, which led to delayed or abandoned applications. The agency received criticism for not doing more to reach hard-to-reach populations, particularly Hispanics and immigrants with Limited English Proficiency (LEP). These challenges notwithstanding, the state enrolled unexpectedly large numbers of people in 2014. In late 2014 and 2015, the state was taking action to address many of the challenges it faced during the first open enrollment period.

Who gained coverage and who remained uninsured?

Examining characteristics of the previously insured, newly insured and remaining uninsured are important to understanding who gained and who was left out of coverage in 2014 and targeting ongoing outreach.

The newly insured and remaining uninsured populations resemble each other with respect to income, age, and health status and have different characteristics from the previously insured. The vast majority of newly insured (94%) and uninsured adults (86%) in California meet the income requirements for Medi-Cal or subsidies in Covered California (below 400% FPL), compared to just over half of the previously insured (57%). In addition, the share of uninsured (21%) and newly insured (22%) who are young adults (age 19-25) were about the same, while previously insured were less likely to be young adults (13%). While there are no significant differences in the share of uninsured (37%) and newly insured adults (30%) who say their health is fair or poor, uninsured adults are less likely than adults with coverage to have a diagnosed medical condition. These patterns indicate that older or sicker individuals did not disproportionately take up coverage in 2014.

However, the insured and uninsured populations in California differ on some important factors, such as race/ethnicity, work status, gender and immigration status. Mirroring historical patterns and legal barriers to coverage, the remaining uninsured population is more likely than the insured to be Hispanic, to be male and to be undocumented. The high share of remaining uninsured who are Hispanic may reflect barriers in outreach to this population or eligibility limits based on immigration. Though most newly insured and uninsured adults are in a family with a full or part-time worker, the specific work profile differs between groups: newly insured adults are less likely than remaining uninsured adults to be in a family with a full-time worker (versus only a part-time worker). With new coverage provisions in place as of 2014, there were more options for health insurance outside employment, and groups traditionally left out of the employer based system—such as part-time workers or low-wage workers—had new avenues for coverage.

Who is covered by different programs in California?

Understanding the profile of the population covered by different types of insurance in the state is essential to designing effective health plans to serve their needs. With the expansion of Medi-Cal, the program grew to include individuals not traditionally covered by the program, which has changed the profile of the overall program in some ways. The profile of Covered California enrollees shows that the program is playing an essential role in covering groups that have been left out of coverage expansions in the past.

Medi-Cal and Covered California enrollees are more likely to be racially diverse, and are made up primarily of working adults without dependent children. Whereas half of those with other private insurance identify as White Non-Hispanic, two-thirds of Medi-Cal and 60% of Covered California enrollees identify as a person of color. Adults without dependent children have generally been excluded from public coverage and assistance in the past, but in 2014, 62% of adult Medi-Cal enrollees and 72% of adult Covered California enrollees did not have dependents. Further, about half of Medi-Cal and nearly three-quarters of Covered California adults are in a working family, though a larger share of adults in Covered California are in a family with a full-time (49% vs. 26%) or part-time (23% vs. 19%) worker. By gender, nearly two-thirds (64%) of adults covered by Medi-Cal are female, compared with about half of adults with Covered California or other private coverage.

Though the adult Medi-Cal population is younger than that of other coverage groups, enrollees have poorer health status. Forty percent of adult Medi-Cal enrollees are under age 34, compared to about a third of Covered California adults and adults with other private coverage. Notably, more than half of adults enrolled in Covered California are over age 45. Nonetheless, Medi-Cal retains many of its traditional roles of serving many individuals with substantial health needs: In 2014, Medi-Cal beneficiaries were more likely than adults with other types of coverage to say their physical health or mental health was fair or poor and more likely to have an ongoing health condition.

What has happened to access to care for the insured and remaining uninsured?

The ultimate goal of expanding health insurance coverage is to help people access the medical services that they need. The survey findings reinforce a large body of literature showing that adults with coverage have better access to care than those who remain without coverage.

Newly insured adults were more likely to change where they usually go for care than their previously insured counterparts, but clinics remain an important source of care for newly insured adults. Newly insured adults were more likely than those who remained uninsured to have a usual source of care and a regular doctor at their usual source of care. Of those, nearly a fifth (19%) reported changing where they usually go for care since gaining coverage, and most said it was due to their insurance. These rates were higher than those among the previously insured. Still, both uninsured and newly insured adults with a usual source of care are most likely to use a clinic or health center for that care, compared with previously insured adults who were most likely to use a doctor’s office or HMO. When asked why they chose their site of care, more than a third (37%) of uninsured adults say they use their usual source of care because it is affordable, compared with 40% of newly insured who chose it because it was convenient.

Adults with insurance coverage were more likely than the uninsured to have used medical services or received preventive care. More than half (58%) of newly insured adults said that they used at least one medical service since gaining their coverage, and nearly half (47%) had received a preventive visit or check-up. Still reflecting some unmet need, more than a third of newly insured adults (35%) reported that they postponed or went without needed care, the same share as the uninsured. Among those who do have coverage, postponing care could be related to several factors, including difficulty finding a provider, problems navigating the health system and health insurance networks, misunderstanding of how to use coverage and when to seek care, or concerns about out-of-pocket costs.

Though most adults did not report problems getting appointments, adults with Covered California or Medi-Cal were more likely than those with other private coverage to say a provider would not see them due to coverage. Compared to only 3% of adults with other private coverage, 13% of adults with Covered California and 8% of adults with Medi-Cal say a provider would not take them as a patient because of their coverage. Medi-Cal enrollees also reported higher rates of long waits for appointments (21%) than those with other private coverage. Like the forces underlying choice of usual source of care, these issues may reflect continuing problems with network adequacy, despite the existence of state standards for network adequacy and patient access.

How do people view their coverage?

People’s views of their plan may affect not only their use of their coverage but also the likelihood that they re-enroll in coverage or change plans. Survey findings indicate that, while most people do not report problems with their plan, additional education may be needed to help newly insured people understand their coverage.

Newly insured adults were less likely to prioritize scope of coverage or provider networks in choosing their plan than previously insured adults. Less than a fifth (19%) of newly insured adults say they chose their plan because of the benefits covered, compared to 33% of previously insured adults, and only 14% say they chose their plan based on provider network (versus 26% of previously insured). Rather, newly insured adults were most sensitive to price when choosing their plan, with nearly a third saying they chose based on price. These patterns likely reflect regulations requiring similar scope of benefits across new plans and ongoing price sensitivity among low and middle income adults.

Across coverage groups, most insured adults did not report having difficulty with the plan selection process or other specific problems with their health plan. There were no significant differences across groups comparing services, costs, or provider networks across plans, though the newly insured were more likely than the previously insured to report at least one difficulty (48% versus 34%). When asked specifically if they encountered various problems with their coverage, such as scope of coverage, costs, or customer service, newly insured adults reported similar or lower rates than previously insured.

Newly insured adults were less likely than previously insured to understand the details of their plan and to give their health plan high ratings. Compared with the previously insured, newly insured adults were less likely to say they understand the services their plan covers (65% vs. 80%) or how much they would have to pay when they visit a health care provider (66% vs. 84%) “very well” or “somewhat well.” Though 70% of newly insured adults rate their coverage as “excellent” or “good” (versus “not so good” or “poor”), this rate was lower than that among previously insured adults (87%). It is possible that newly insured adults face challenges in understanding the complexity of insurance coverage, especially since many adults who were uninsured before the ACA reported that they had never had health insurance.

How does coverage affect financial security?

Health care costs can be a major burden for low-income families. Survey findings indicate that while coverage can ameliorate some of the financial challenges that low and moderate income adults face, many will continue to face financial challenges in other areas of their lives.

Many Covered California enrollees report difficulty paying their monthly premium. Nearly half of newly insured adults (47%) say it is somewhat or very difficult to afford their monthly premium, compared to just 27% of adults who were insured before 2014. Further, 44% of Covered California enrollees report difficulty paying their monthly premium, versus a quarter of adults with other types of private coverage.

However, coverage does provide financial protection from medical bills and eases concern over affording medical care. Compared to the uninsured, both newly insured and previously insured adults report lower rates of difficulty paying medical bills and living with worry about their ability to afford medical care in the future.

Many newly insured adults still face financial insecurity in areas outside of health care costs. While coverage provides some financial protection from medical bills, there were no significant differences in the share of uninsured and newly insured adults reporting difficulty paying for necessities, saving money, or paying off debt. Previously insured adults were less likely than uninsured to report these challenges.

Why are people still uninsured and what are their coverage options?

Though much attention was paid to the difficulties with the application and enrollment process during the 2014 open enrollment period, logistical issues were not a leading reason why people went without insurance in 2014. Rather, lack of awareness of new coverage options and financial assistance appear to be a major barrier.

Most adults who were uninsured in fall 2014 had not tried to get ACA coverage, and perceptions of cost and eligibility were a common reason for not obtaining coverage. The main reason that all uninsured gave for why they lack coverage is that it is too expensive (44%). Among the roughly one-third of uninsured who tried to sign up for ACA coverage, the most common reason people gave for not having ACA coverage was being told they were ineligible (38%) or because it was too expensive (21%). Still, when asked directly about application difficulty, most uninsured adults who sought ACA coverage reported difficulty with at least one aspect of the process, and most tried more than one avenue.

Few adults who were uninsured at the end of 2014 had plans to obtain ACA coverage in 2015. Only about half of uninsured adults indicated that they plan to get coverage in 2015, and few who do identified Medicaid or Marketplace coverage as their goal. Rather, higher shares indicate that they don’t know where they will get coverage or plan to get coverage through a job. However, few are likely to gain coverage through an employer either because they are self-employed or not in a working family (38%), or because the employer does not offer coverage (32%) or coverage for which they are eligible (8%).

Policy Implications

As we enter the second year of new coverage under the ACA, information on people’s experience during the first year can inform ongoing efforts to extend and improve health coverage in California.

Covering the Remaining Uninsured

Cost continues to prevent many uninsured adults from seeking coverage. While some uninsured adults are ineligible for assistance, most can receive some help under the law. Thus, there may be a continuing lack of awareness of new coverage options and financial assistance. Messages that focus on low-cost or free coverage being available to most uninsured may help address these barriers to seeking and obtaining coverage.

Given the high share of remaining uninsured who are Hispanic, targeted outreach to this group is appropriate. In the early stages of ACA implementation in the state, there was much attention to the Hispanic population but administrative barriers in reaching them. In 2015, the state made efforts to reach this population, resulting in higher enrollment among this population. Still, ongoing efforts are needed to enroll eligible Hispanics and to serve those who may be ineligible for coverage due to their immigration status.

Community outreach may help engage many remaining uninsured. A minority of uninsured adults who sought ACA coverage had contact with a provider, community group, or other outreach worker, and many hard-to-reach groups, such as young adults, immigrants, and people with limited English proficiency, require such one-on-one assistance. In 2015, outreach resources will shrink, making these efforts more difficult.

Providing needed services to the remaining uninsured

Clinics and health centers remain core providers for the uninsured and will require ongoing support to serve this population. Safety net providers are likely to play an important, ongoing role in serving the uninsured. However, experts note that these providers are also adapting to meet the changing health care environment, including becoming “providers of choice” to retain patients as they gain coverage.

While some uninsured are able to navigate the system when they need care, most are not and face serious consequences as a result. Experts noted that access to care for the uninsured varies by region within the state. Particularly in rural areas, provider shortages exist for both insured and uninsured people. In addition, not all counties provide services to the undocumented, and those that do vary greatly in the scope of these services. Since people will continue to lack coverage under the ACA, planned efforts to deliver services to the underserved may be necessary.

Improving care for the insured

While most adults with coverage have positive views and experience with their health plan across coverage type, consumer education about health insurance and health care may be needed. According to experts in the state, during outreach, assistors noted that many people appeared to not understand basic aspects of their health plan. While initial outreach efforts were focused on enrollment, education about coverage and health care is the next phase of bringing people into the health care system.

While coverage eases financial strain of health care, many newly insured adults are in precarious financial situations and still report affordability problems. While premium and cost-sharing subsides in Covered California are set at the federal level, continued attention to whether affordability measures are sufficient may provide insight into people’s take-up and use of new coverage.

Continued attention is needed to ensure those who have coverage are able to access care. Some newly insured adults still report access barriers. These barriers could be related to several factors, including network adequacy or difficulty finding a provider, problems navigating the health system and insurance networks, misunderstanding of how to use coverage and when to seek care, or concerns about out-of-pocket costs.