Coverage Expansions and the Remaining Uninsured: A Look at California During Year One of ACA Implementation
Background: ACA Implementation in California
As the nation’s most populous state, California faced a daunting challenge in expanding coverage under the ACA. Prior to ACA implementation, California had the largest number of uninsured of any state in the country. In 2010, when the ACA was passed, 6.8 million people in the state (or 18.5%) were uninsured,1 and California alone accounted for 14% of all uninsured people nationwide. Private coverage rates in the state were low due to a combination of high unemployment (which limited access to employer coverage) and high premium costs for non-group coverage2 (which made such coverage unaffordable for many). Public coverage through the state’s Medicaid program, Medi-Cal, was limited to only some groups of low-income adults, leaving many without an affordable coverage option. California is also a highly diverse state, with a majority of the population identifying as a race other than White3 and nearly half of residents speaking a language other than English in the home.4 Services for the uninsured in the state were largely devolved to California’s 58 counties, leading to variation in existing financing and availability of services for residents who lacked insurance coverage or regular care.
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. While these efforts resulted in substantial coverage gains, the state—like all states—faced some early challenges under the ACA.
Early Implementation Efforts and Coverage Gains
California was one of a handful of states to undertake an early expansion of its Medicaid program in anticipation of full expansion in 2014. The state did so under its five-year “Bridge to Reform” §1115 Medicaid Demonstration Waiver, which was approved by the federal government in 2010. In addition to other provisions, the waiver allowed for federal matching funds for the creation of a county-based coverage expansion program for low-income adults not otherwise eligible for Medi-Cal, known as the Low Income Health Program (LIHP). The majority of counties participated in LIHP, and by the end of 2013, over 650,000 people were enrolled in the program.5 As discussed below, these individuals were either auto-enrolled in Medi-Cal or transferred to Covered California when these options became available in January 2014.6
LIHP also enacted innovative strategies to redesign the delivery of health care within California’s safety net system, including the development of robust provider networks and the integration of physical and behavioral health care, among others.7 As part of the “Bridge to Reform” waiver, California was also the first state in the country to adopt the Delivery System Reform Incentive Program (DSRIP) to assist California’s safety-net hospitals expand access to primary care, improve care and health outcomes, and increase efficiency.8
Even with the availability of coverage through LIHP, millions of Californians lacked coverage at the end of 2013. Some of these individuals are ineligible for assistance due to their immigration status (estimates revealed that about a fifth of uninsured California adults in 2013 were undocumented immigrants9), but many were likely eligible for Medi-Cal or Covered California subsidies. A majority of uninsured adults on the eve of full ACA implementation (52%) had family income below 138% of poverty, and most (71%) were either working themselves or had a spouse who worked. Compared to insured adults in the state, uninsured adults were more likely to be Hispanic and more likely to be young adults. These characteristics helped shape efforts to reach the eligible uninsured in 2014 and provide needed services to the ineligible population.
Medi-Cal Expansion and Covered California
As of January 2014, California expanded Medi-Cal statewide to cover low-income adults. In addition, subsidized coverage was available for moderate income adults who purchased insurance through the state’s health insurance marketplace, Covered California.
Under the Medi-Cal expansion, Medi-Cal was extended to all citizens and legal immigrants who have been in the country for over five years with income below 138% FPL ($16,105 for an individual or $27,210 for a family of three in 2014). Eligible lawfully residing immigrant pregnant women in this income range are exempt from the five year waiting period for coverage and can receive full-scope Medi-Cal10 and pregnant women with incomes between 109% and 208% FPL are eligible for Medi-Cal pregnancy-only coverage.11 Income-eligible legal immigrants who have been in the country less than five years became eligible for full-scope, state-only funded Medi-Cal beginning in January 2014 and were scheduled to transition to Covered California in January 2015;12 however, this transition has been delayed.13 When the transition takes place, these individuals will receive an affordability wraparound, ensuring that premiums, out-of-pocket costs, and covered services are the same as if they were enrolled in Medi-Cal. Undocumented immigrants who satisfy the income and residency requirements are eligible for limited scope Medi-Cal benefits, including emergency room services, long-term care, kidney dialysis, and prenatal care.14
California operates its own insurance marketplace, known as “Covered California,” as an independent public agency. Through Covered California, individuals who do not have access to another source of affordable coverage are eligible to purchase individual coverage directly from insurers. People with incomes between 139% and 400% of poverty are eligible for premium tax credits, and people with incomes between 139 and 250% of poverty are also eligible for cost-sharing subsidies. In addition, small businesses (up to 50 workers) can offer coverage to their workers via Covered California’s Small Business Health Options Program (SHOP). Legal, permanent residents who have been living in the country for less than five years may purchase health insurance through Covered California and may receive subsidies. Undocumented immigrants are prohibited from purchasing insurance in the Marketplace. Statewide, the average premium rate for the lowest Bronze plan was $219 per month in 2014 and $304 per month for the lowest cost silver plan.15
Covered California received federal funding to create a single online portal, available in Spanish and English, where users can apply and receive eligibility determinations for Medi-Cal or Marketplace insurance. The application can also be completed in-person, by phone, fax or mail, and paper applications are available in thirteen languages. In addition, individuals may continue to apply for Medi-Cal through their county Medi-Cal office. Covered California’s online application system, also known as the California Health Care Eligibility, Enrollment and Retention System (CalHEERs), coordinates with counties’ social services department through an online system called Statewide Automated Welfare Systems (SAWS).
On October 1, 2013, individuals and small businesses could begin shopping for health insurance plans. Coverage purchased through Covered California and coverage under the Medi-Cal expansion started in January 2014. Individuals who had gained coverage under the early LIHP expansion were auto-enrolled in coverage. Specifically, roughly 630,000 LIHP members were auto-enrolled in Medi-Cal, and an additional 25,000 were transitioned into Covered California.16 Open enrollment for Covered California ended on March 15, 2014 (though applications in progress were granted an extension17), while Medi-Cal enrollment was open throughout the year.
Outreach and Enrollment Throughout 2014
Leading up to and throughout ACA implementation, the state invested heavily in outreach and enrollment efforts for both Medi-Cal and Covered California. These efforts included statewide marketing campaigns, community mobilization, provider training, and targeted efforts to reach vulnerable populations who may be newly-eligible for coverage. Covered California also established an Assisters Program and worked with community organizations to provide direct assistance to consumers to help them enroll in coverage. In addition, the state received extensive federal funds and funds from private foundations, including $23 million from the California Endowment,18 most of which were distributed to localities, for local outreach efforts. These local outreach efforts included (among other things) support for Medi-Cal Certified Enrollment Counselors, outreach to hard-to-reach populations, and marketing to increase awareness and understanding of new coverage options.19, 20, 21 Experts believe that the local efforts to enroll eligible individuals were a key factor in driving high enrollment rates. In addition, 125 health centers operating over 1,000 sites throughout the state received federal grants to help with outreach and enrollment assistance,22 and experts noted that these providers were also crucial to enrollment efforts.
Alongside its extensive outreach efforts, California also took various steps to simplify and streamline enrollment. In addition to transitioning people from LIHP to Medi-Cal, the state also uses Hospital Presumptive Eligibility (PE) and adopted the Express Lane Enrollment Project. Under the PE program, hospitals can assist patients who are receiving services in the hospital in applying for temporary Medi-Cal benefits, producing an immediate eligibility determination based on the information provided in the application.23 The Express Lane Enrollment Project targeted adults and children enrolled in CalFresh, California’s Supplemental Nutrition Assistance Program (SNAP). Through a waiver the state was able to use CalFresh income eligibility to grant Medi-Cal eligibility to CalFresh enrollees without the need for an application or a determination for 12 months.24
Despite all these efforts, the state experienced some challenges in enrollment in 2014. Organizations and individuals encountered challenges with the Covered California in-person assister training process, including an insufficient number of training sessions, which led to a shortage of Certified Enrollment Counselors (CECs).25 In addition, educators and enrollment counselors cited problems with cultural and linguistic resources, including poorly translated materials that left many people confused, and a shortage of linguistically-appropriate materials.26 Some of these issues were addressed toward the end of open-enrollment and leading up to the second enrollment period, which began in the fall of 2014.27 In particular, Covered California made improvements to its Spanish-language website, added more bi-lingual employees and held community events in areas with large Latino populations.
In addition, though people began applying for coverage on October 1, 2013, the interface between CalHEERS and SAWS was not functional until late January 2014,28 thus delaying the enrollment process for consumers and health plans. A combination of technological issues as well as pending documentation on the part of applicants resulted in a Medi-Cal backlog of approximately 900,000 applications by May of 2014. The agency did its best to work through these applications; however, as recently as February of 2015, roughly 45,000 applications were still awaiting eligibility determinations and had gone unanswered.29
The Covered California website also contained small technical glitches across both the English and Spanish versions of the site that sometimes made navigating the site difficult or impossible. For example, the site would shut down while undergoing updates. Consumers and counselors reported long waits when seeking assistance through Covered California’s telephone hotlines, and counselors reported dropped calls while waiting to be transferred to multilingual call center representatives.30 The agency received criticism for not offering the Spanish-language paper applications until half-way through open-enrollment, posing a problem for users who did not have access to high-speed internet.31
These challenges notwithstanding, the state enrolled unexpectedly large numbers of people in 2014. By October 2014, nearly 1.7 million people applied and were determined eligible for Covered California health plans, doubling base projections of 816,00032 and representing about half of the marketplace-eligible population.33 The vast majority (83%) of people who enrolled received financial assistance (compared to 85% nationally).34 Los Angeles County alone accounted for over 400,000 enrollees.35 More than half of all enrollees into Covered California received enrollment help from a Certified Insurance Agents (36%), Certified Enrollment Counselor (8%), Service Center Representatives (10%), or other assister or navigator.36 Though ten health insurance companies offered plans in the Marketplace, the vast majority of people in Covered California chose a plan offered by one of the state’s four largest insurers—Anthem, Blue Shield of California, Kaiser Permanente or Health Net.37
Enrollment in the Medi-Cal program grew by 30%, or 2.8 million people, between October 2013 and the end of 2014.38 Of the approximately 1.9 million who enrolled in Medi-Cal between October 2013 and the end of the open enrollment period (March 15, 2014), 1 million applied through the Covered California portal and county offices, 630,000 transitioned from LIHP, and 180,000 applied through the state’s Express Lane Program.39 While some enrollees may have been eligible for Medi-Cal before the ACA, more than half (59%) are likely newly-eligible under the expansion.40
Despite the various challenges, California made substantial gains in reaching and enrolling millions of people throughout the state during the first year of coverage expansions under the ACA. In 2015, the state is building on these gains and addressing many of the issues that arose in the first year.Introduction Who gained coverage and who remained uninsured?