The Uninsured at the Starting Line in California: California findings from the 2013 Kaiser Survey of Low-Income Americans and the ACA

In January 2014, the major coverage provisions of the 2010 Affordable Care Act (ACA) went into full effect. These provisions include the creation of new Health Insurance Marketplaces (known in California as Covered California) where low and moderate income families can receive premium tax credits to purchase coverage and, in states that opted to expand their Medicaid (known in California as Medi-Cal) programs, the expansion of Medicaid eligibility to adults with incomes at or below 138% of the federal poverty level (FPL). The ACA has the potential to reach many of the 47 million Americans who lack insurance coverage, including 7 million in California, as well as millions of insured people who face financial strain or coverage limits related to health insurance.

California was one six states that opted to expand health coverage early to low-income adults in preparation for the ACA.¹ The state did so through its §1115 Bridge to Reform Medicaid waiver, which created the Low-Income Health Program (LIHP).² LIHP reached many uninsured adults, and millions more are eligible for coverage through the Medi-Cal expansion or through Covered California.³ Though implementation is underway in California and across the country and people are already enrolling in coverage, policymakers continue to need information to inform the early stages of these coverage expansions. Data on Californians targeted for coverage expansions’ experience with health coverage, current patterns of care, and family situation can help state policymakers target early efforts and provide insight into some of the challenges that are arising in the first months of new coverage.

This report, based on findings from the 2013 Kaiser Survey of Low-Income Americans and the ACA, provides a snapshot of health insurance coverage, health care use and barriers to care, and financial security among insured and uninsured California adults across the income spectrum at the starting line of ACA implementation. The survey, conducted between July and September 2013, is a nationally representative survey that also includes a state-representative sample of over 2,500 nonelderly (age 19-64) adults in California. It was designed to focus on the low- and moderate-income populations in the state and includes over-samples of people in the income range for financial assistance under the ACA (≤ 138% FPL for Medi-Cal and 139-400% FPL for Covered California), as well as a comparison group with incomes over 400% FPL. The survey includes adults with employer coverage, nongroup, Medi-Cal, and other sources of coverage, as well as those with no health insurance. The California component of the survey and report on its findings complements a report on similar findings for the nation.⁴

This survey and report provides new data to help policymakers further understand early challenges in implementing health reform and assist outreach and enrollment workers, health plans, and providers and health systems. This survey also provides a baseline for future assessment of the impact of the ACA in California on health coverage, access, and financial security of low- and moderate-income individuals. Detailed information on the survey design, sample, and analysis can be found in the Methods section at the end of the full report.

Background: The Challenge of Expanding Health Coverage in California

Prior to implementation of the ACA, nearly 7 million Californians—21% of the state’s nonelderly population—were without health insurance coverage. Because publicly-financed coverage has already been expanded to most low-income children and Medicare covers nearly all of the elderly, the vast majority of uninsured people in California and across the country are nonelderly adults.⁵ The main barrier that people have faced in obtaining health insurance coverage is cost: health coverage is expensive, and few people can afford to buy it on their own. While most Americans traditionally obtain health insurance coverage as a fringe benefit through an employer, not all workers are offered employer coverage. Medi-Cal covers many low-income children, but eligibility for parents and adults without dependent children was limited before the ACA, leaving many adults without affordable coverage.

Barriers to coverage are reflected in the characteristics of the uninsured population in California. Uninsured California adults are more likely to be low-income than Californians with private health insurance (including employer coverage and nongroup coverage), while adults with Medi-Cal coverage are particularly low-income (reflecting pre-ACA eligibility limits). Though the majority of uninsured adults are in a family with either a full- or part-time worker, uninsured California adults are less likely than privately insured adults to be in families with either a full- or part-time worker. The unique demographics of the state population also play a role in shaping the profile of uninsured Californians. California is a highly-diverse state, with 60% of the state population identifying as a race other than White, and the state is home to more than 10 million immigrants. The state also has the largest number of undocumented immigrants in the nation. While these demographics characterize the entire state population, the majority of uninsured adults in California are people of color (74%), and over a third (36%) are not U.S. citizens. These demographics have implications for outreach efforts as well as eligibility, since non-citizens may face restrictions on eligibility depending on their documentation status.

I. Patterns of Coverage and the Need for Assistance

Examining patterns of coverage and the reasons the uninsured lack coverage can inform both outreach avenues and potential barriers to outreach and enrollment. Key survey findings on access to coverage include:

For most currently uninsured adults in California, lack of coverage is a long-term issue. While some people experience short spells of uninsurance due to job changes, income fluctuations, or renewal issues, for most uninsured California adults, lack of coverage is a chronic issue. The survey shows that half (50%) of uninsured adults report being uninsured for 5 years or more, including 22% of the uninsured who report that they have never had coverage in their lifetime.

Many uninsured adults in California report trying to obtain insurance coverage in the past, but most did not have access to affordable coverage. Prior to the ACA, California’s uninsured reported difficulty gaining insurance coverage due to the high cost of coverage and limits on Medi-Cal eligibility for adults. More than eight in ten (82%) uninsured adults report no access to employer insurance, and the majority of people who had access to coverage through an employer report that the coverage offered to them is not affordable. One-quarter of uninsured California adults (24%) reported trying to sign up for Medi-Cal in the past five years, and the majority of them were unsuccessful because they were told they were ineligible. And one in six uninsured California adults (17%) reported trying to obtain nongroup coverage in the past five years, with most not purchasing a plan because the policy they were offered was too expensive.

Health insurance coverage is not always stable. For most insured adults in California, coverage is continuous throughout the year and over time, but a sizable number have a gap or change in coverage. When accounting for both insured Californians with a gap in their coverage and uninsured Californians who recently lost coverage, the survey indicates that 8% of adults in California, or almost 2 million people, lose or gain coverage over the course of a year. In addition to those who lose or gain coverage over the course of a year, 1.4 million continuously insured adults report having a change in their health insurance plan. The most common reasons for a change in coverage appear to be related to employment. Last, a small number of insured California adults report challenges in either renewing or keeping their coverage, another indication of instability in coverage throughout the year.

Informing California’s ACA Implementation: Many of the barriers to coverage that California’s uninsured reported facing in the past are addressed by the ACA’s provisions to expand Medi-Cal and provide premium tax credits for Covered California coverage. However, some uninsured adults may continue to face financial barriers to coverage, as undocumented immigrants are excluded from receiving financial assistance under the ACA. Californians targeted by the ACA have varying levels of experience with the insurance system. A large share of uninsured adults in California has been outside the insurance system for quite some time, and the long-term uninsured may require targeted outreach and education efforts to link them to the health care system and help them navigate their new health insurance. In addition, people who have attempted to obtain coverage in the past may be unaware that rules and costs have changed under the ACA; outreach and education will be needed to inform people that eligibility rules have changed and that financial assistance is available to offset the cost of coverage.

While there has been much focus on enrolling currently uninsured people into Medi-Cal or Covered California coverage, survey findings demonstrate that people will continue to move around within the insurance system throughout the year as their income or job situations change. Thus, implementation is not a “one shot” effort that will be done once Californians are enrolled or transferred to Medi-Cal or Covered California in the early part of 2014, but rather will require a continuous effort to enroll and keep people in coverage. With this challenge in mind, California has sought federal grants and other investments for ongoing outreach, enrollment, and education efforts. However, efforts at all levels within the state will need to be sustained looking forward.

II. What to Look for in Enrolling in New Coverage

While many currently uninsured adults in California have limited experience in signing up for and using health coverage, the past successes and challenges of insured low-and moderate income adults can inform the experiences of those seeking coverage under the ACA. Key survey findings related to plan enrollment and plan choice are:

While many adults in California report facing no difficulty in applying for Medi-Cal coverage prior to the ACA, some encountered difficulties in the process of applying for public coverage in the past. California adults who currently have Medi-Cal or who have attempted to enroll in the past five years reported little difficulty in taking steps to enroll in Medi-Cal, with almost half (48%) saying the entire process was very or somewhat easy. However, the rest found at least one aspect of the process – finding out how to apply, filling out the application, assembling the required paperwork, or submitting the application – to be somewhat or very difficult. The most commonly-reported difficulty was assembling the required paperwork, which about a third of Californians who applied or enrolled said was somewhat or very difficult.

When adults with Medi-Cal or private insurance have a choice of plan, they do not always prioritize costs over other plan features in making that choice, and many find some aspect of the plan choice process to be a challenge.  Adults chose health plans for various reasons, with 29% of those who had and made a choice of plan reporting that they chose their plan because it covered a wide range of benefits or a specific benefit that they need, 27% because their costs would be low, and 27% because the plan had a broad selection of providers or included their doctor. In choosing a plan, even if they have limited options, Californians may face challenges in comparing costs, services, and provider networks, as these factors have typically varied greatly across plans in the past. In general, insured adults in California report that they did not have difficulty in comparing their plan choices, but 38% found some aspect of plan choice—comparing services, comparing costs, and comparing providers— to be difficult.

Overall, adults in California with employer coverage, nongroup, or Medi-Cal report satisfaction with their current coverage but also report gaps in covered services and problems when using their coverage. Most (85%) insured adults in California rate their pre-ACA coverage as excellent or good, but they also report gaps in services that are covered by their current insurance. One in five (20%) insured adults in California report needing a service that is not covered by their current plan, typically ancillary services, such as dental, vision care, and chiropractor services. Many insured adults in California reported experiencing a problem with their current insurance plan covering a specific benefit, either because they were denied coverage for a service they thought was covered (24%) or their out-of-pocket costs for a service were higher than they expected (35%).

Informing ACA Implementation. The ACA includes provisions to simplify the Medi-Cal application and enrollment process for coverage. The ACA also requires plans in the Covered California Marketplace to provide detailed, standardized plan information for people to compare coverage options. Uninsured California adults applying for coverage after these new processes are implemented should encounter fewer challenges in navigating enrollment and plan choice than applicants have in the past. However, in evaluating the success of plan enrollment, it is important to bear in mind that, even prior to the ACA, insured adults faced some challenges in comparing and selecting insurance coverage. While provisions in the ACA could address these challenges, some are inherent to the complexity of insurance coverage. Ongoing efforts in the state are also trying to make the process of enrolling in Medi-Cal coverage a more positive and welcoming experience, which calls for a culture shift to reorient Medicaid management, systems, and caseworker training away from welfare-style “gatekeeping” and toward encouraging participation.⁶ It is also important to remember that people place utility on a range of factors related to insurance, including scope of services and provider networks. Assessments of whether people are choosing the optimal plan for themselves and their family will need to consider the multiple priorities that people balance in plan selection. Last, while the ACA aims to ensure coverage of at least a basic set of essential health benefits (EHB), many of the ancillary services that people report needing coverage for—such as dental services—are not included in the EHB. Newly-insured Californians may be surprised to learn that some ancillary services are not included in their plan, and education efforts will be needed to help Californians understand their coverage.

III. Gaining Coverage, Getting Care

As uninsured adults in California gain coverage, there are likely to be changes in how often they seek care, what type of care they seek, and where they seek care. By comparing their current interactions with the health care system to their insured counterparts, the survey can provide insight into likely changes. Key findings in this area include:

A large segment of the uninsured in California has little or no connection to the health care system. Most uninsured adults report few connections to the health care system. Only 49% of uninsured adults report that they have a usual source of care, or a place to go when they are sick or need advice about their health, and only 23% of uninsured adults say they have a regular doctor, one-third of the rate of insured adults in California. This lack of a connection to the health care system leads many uninsured adults to go without care. Nearly five in ten uninsured adults in California (49%) reported no health care visits in the past year, compared to 15% of Medi-Cal beneficiaries and 14% of adults with employer coverage.

Many uninsured Californians have health needs, many of which are unmet or only met with difficulty. Uninsured adults are less likely than their insured counterparts to report receiving care for an ongoing health condition. When uninsured individuals do receive care, they sometimes receive free or reduced-cost care, though the majority who use services do not. More than four in ten (42%) of the uninsured and almost half (48%) of Medi-Cal beneficiaries in California report needing but postponing care, compared to 29% of adults with employer coverage. The most common reason for postponing care among the uninsured is cost, as the uninsured have no coverage to help them with the cost of care.

Many uninsured Californians report limited options for receiving health care when they need it. Uninsured adults in California are less likely than their insured counterparts to receive care in a private physician’s office when they do get care. Uninsured adults and adults with Medi-Cal are more likely than privately-insured adults to report that they have limited options for their usual source of care, with 12% of the uninsured and 13% of Medi-Cal beneficiaries reporting that they chose their usual source of care because it is the only option available to them, compared to 4% with employer coverage.

Informing ACA Implementation: The survey findings reinforce conclusions based on prior research: having health insurance affects the way that people interact with the health care system, and people without insurance have poorer access to services than those with coverage. Thus, gaining coverage is likely to connect many currently uninsured California adults to the health care system. Given the health profile of California’s currently uninsured population, there is likely to be some pent-up demand for health care services among the newly-covered. However, outreach may be needed to link the newly-insured to a regular provider and help them establish a pattern of regular preventive care. In particular, some individuals who have relied on emergency rooms or urgent care centers as their usual source of care may require help in establishing new patterns of care and navigating the primary care system. While California’s uninsured may have more options for where to receive their care once they obtain coverage under the ACA, clinics and hospitals that already see a large share of uninsured adults may continue to play an important role in serving this population once they gain insurance. Last, while coverage gains may reduce cost barriers to care, it will be important to monitor whether other barriers to care among the low-income population—such as transportation or wait times for appointments—continue to pose a challenge for access.

IV. Health Coverage and Financial Security

In addition to facilitating access to health care, health insurance serves primarily to protect people from high, unexpected medical costs. However, for low-income families in California, health costs can still be a burden, even if they have insurance. Understanding these issues can help policymakers monitor ongoing financial barriers to health services.

Health care costs pose a challenge for low- and moderate-income families in California, even if they have insurance coverage. Even among those with insurance, health care costs can be a burden, particularly for low- and moderate-income adults. About a third of low- and moderate-income adults in California who are covered by employer coverage report that their share of the premium is somewhat hard or very hard for them to afford, and three-quarters (76%) of moderate-income adults in California with nongroup coverage report difficulty paying their premiums. Health care costs translate to medical debt for many l0w-income adults, and these medical bills can cause serious financial strain. Notable shares of low-income insured adults also report that they lack confidence in their ability to afford health care, given their current finances and health insurance situation.

Low-income families face fragile financial circumstances. Low- and moderate-income adults in California across coverage groups report not being financially secure. However, adults who are low-income and uninsured or covered by Medi-Cal are particularly vulnerable to financial insecurity even outside of health care. General financial insecurity translates to concrete financial difficulties in making ends meet. Uninsured adults and those enrolled in Medi-Cal are more likely than privately-insured adults to have difficulty paying for other necessities, such as food, housing, or utilities, with 59% of the uninsured and 66% of those on Medi-Cal reporting such difficulty compared to 18% of those with employer coverage and 31% of those with nongroup coverage. While low-income adults across the coverage spectrum report high rates of difficulty paying for necessities, those with employer coverage report the lowest rates in this income group. These individuals may have stronger or more stable ties to employment than their counterparts with other or no insurance coverage. Higher rates of financial insecurity among Medi-Cal enrollees may reflect pre-ACA Medicaid eligibility rules, which targeted very vulnerable adults.

Informing ACA Implementation: Both insured and uninsured low-income adults in California struggle with medical bills and debt, and coverage expansions, assistance with premium costs and, for some, cost-sharing, and limits on out-of-pocket costs under the ACA have the potential to ameliorate the financial issues associated with the cost of health care. However, given survey findings that many low-income insured Californians continue to face financial challenges related to health care, it will be important to track whether there are ongoing financial barriers as people enroll in coverage and seek care. While insurance coverage can provide financial protection in the event of illness or injury, it is not curative of all of the financial burdens faced by low-income families. Given their overall situation, health insurance alone may not lift low-income Californians out of poverty, and many low-income California adults may continue to face financial challenges even after gaining coverage.

V. Low- and Moderate-income Uninsured California Adults’ Readiness for the ACA

As outreach and enrollment efforts are underway in California, information on low- and moderate-income adults’ access to tools for signing up for coverage and connections to outreach avenues can be helpful in addressing barriers. Key survey findings in this area include:

A majority of uninsured adults in California who are income eligible for coverage expansions reported knowing little or nothing about Medi-Cal and Covered California programs prior to the start of open enrollment. Despite ongoing media attention on the ACA, three-quarters (76%) of uninsured adults in California with incomes in the Medi-Cal target range (≤138% FPL) said they knew nothing at all or only a little about the Medi-Cal program, and five out of six (84%) uninsured adults in the income range for Covered California subsidies (139-400% FPL) reported that they knew nothing at all or only a little about Covered California. More recent national polling data indicates that lack of awareness remains high despite recent media attention on the ACA.

While most uninsured adults in California have the necessary tools for enrolling in coverage, some will experience additional logistical issues in signing up. Under the ACA, internet access is an important tool in accessing coverage. While the majority of uninsured adults have access to the internet either at home or outside the home, 27% of low-income (≤138% FPL) and 13% of moderate income (139-400% FPL) uninsured adults report that they do not have internet access readily available. For Covered California coverage, people will require a means to pay their premiums on a regular basis. While plans must accept various forms of payment, direct withdrawal from a checking account is a simple and reliable way to ensure that premiums are paid on time. However, over a fifth (21%) of uninsured adults in the income range for Covered California subsidies report that they do not have a checking or savings account.

Many uninsured adults in California could be reached through targeted outreach avenues. Among uninsured adults in California with incomes in the range for Medi-Cal eligibility (≤138% FPL), half (50%) report that they or someone in their immediate family receives either CalFresh (California’s Supplemental Nutritional Assistance Program), cash assistance, disability payments, or Medi-Cal, making “fast track” enrollment efforts through using information collected by other agencies a promising avenue for outreach. For those without a connection to social services agencies, outreach through providers may be a promising approach, as about one-quarter of low- or moderate-income uninsured adults in California report that they use a clinic or health center as their usual source of care. While fewer report using a hospital outpatient department for regular care, hospitals reach many uninsured California adults through periodic visits.

Informing ACA Implementation: Both survey findings and more recent polling data indicate that there is a great need for education about new coverage options among Californians targeted for expansions. Even once eligible individuals learn about coverage options, they may face logistical challenges in signing up. Californians without internet access may be able to enroll through other more traditional avenues, such as over the phone or in person at county or provider offices, but efforts may be needed to inform people of these other application routes, and some using them may experience a slower enrollment process than they would if they applied online. Finally, “fast track” enrollment efforts are a promising approach to facilitating enrollment, but broader efforts will also be needed to reach California’s eligible uninsured population. Replicating successful outreach and “inreach” strategies involving service providers and advocacy groups used during LIHP enrollment may be useful for reaching individuals for and Medi-Cal enrollment.⁷ Prior barriers to Medi-Cal and LIHP enrollment efforts, including language and cultural barriers, immigration status, and misconceptions about the programs, may continue to be challenges during the current and future enrollment efforts.