Insurance coverage expansions have been linked to multiple benefits for individuals, communities, and the state. California is taking important steps to broaden affordable options for undocumented immigrants, who comprise a substantial share of uninsured state residents. California will soon extend Medi-Cal coverage to undocumented children and already provides it to some low-income undocumented immigrants. Future options may include comprehensive Medi-Cal and unsubsidized access to Covered California, the state’s health insurance exchange.
About half of California’s undocumented immigrants have incomes low enough to qualify for Medi-Cal should coverage be offered to them. Their highest concentrations are in Los Angeles, Orange, and Santa Clara Counties, the Inland Empire, and the San Joaquin Valley. Those with incomes too high for Medi-Cal are concentrated in the greater San Francisco Bay Area, where premium costs are highest. Even with access to Covered California, lack of subsidies will keep many of them from coverage.
Studies have shown that uninsured families are more likely to suffer from poor health and financial hardships. Without coverage, California’s undocumented adults will continue to rely on county indigent programs and safety net services, adding pressures to these local entities.
Since implementation of the Affordable Care Act (ACA) more than two million uninsured Californians have gained health insurance coverage. This is good for California—prior research has documented both economic and health benefits to those who gain health insurance. Expanded coverage has been linked to lower mortality rates and improved education and employment outcomes. Conversely, high rates of uninsurance have considerable financial implications for hospital systems—which are charged with providing care regardless of insurance coverage—and adversely impact community access to quality health care for local residents even if they are insured.1
In spite of the relative success of the ACA expansions, millions of Californians remain uninsured. Undocumented immigrants were excluded from ACA provisions and comprise the largest segment of this group (estimates suggest between 1.4 and 1.5 million). Clearly, providing affordable insurance coverage options for undocumented immigrants is a key component of any strategy to continue reducing the numbers of California’s uninsured.
Several policy options under consideration at federal, state, and local levels offer opportunities for expanding coverage and improving health care access to California’s undocumented residents. Here we consider the potential reach of two options in particular—access to comprehensive Medi-Cal benefits for low-income residents, and access to purchase health plans through Covered California for those with higher incomes. Because of the regional nature of insurance markets and provider networks—and program eligibility standards based on family income—policymakers need to know not just the size of the undocumented population, but also estimates of their geographic distribution and income levels.2 Our estimates of undocumented immigrants and their poverty status by region will enable policymakers to plan for the inevitable new influx of Medi-Cal participants if current expansion measures succeed.
In this report, we outline the different types of coverage expansions being considered for California’s undocumented residents. We also provide regional population estimates of undocumented immigrants in California, breaking these estimates down into income categories defined by eligibility thresholds for public health insurance programs.
The Affordable Care Act (ACA) greatly expanded insurance coverage for low-income Californians through Medi-Cal, the state’s Medicaid program.3 Even so, about one million low-income adults and some children were ineligible because they are undocumented immigrants.4 For the 60 to 70 percent of undocumented immigrants who lack insurance, health care options are limited.5 Counties provide services to uninsured residents through indigent care programs, but without standard eligibility requirements; several counties exclude undocumented immigrants from these services. Safety net providers—predominantly community clinics and hospital emergency departments—serve patients regardless of immigration status and provide free or reduced-price care based on patient income level. These resources are essential access points to health care for uninsured, undocumented California residents, but are not equivalent to having comprehensive health insurance.
California policymakers have recently taken action to provide comprehensive Medi-Cal benefits for some undocumented immigrants.6 Below we briefly explain how undocumented immigrants may qualify for the Medi-Cal program, either currently or in the future if reform efforts are successful.
Currently, in order to be eligible for comprehensive Medi-Cal benefits, noncitizens must show they are in a "satisfactory immigration status.” Noncitizens are considered in a satisfactory immigration status if they fall into one of several categories.7 Changes to federal immigration policy in recent years have created opportunities for some undocumented immigrants to register for protected status and avoid deportation, which could make them eligible for Medi-Cal coverage if they are low-income. In 2012, an executive order, Deferred Action for Childhood Arrivals (DACA) allowed undocumented immigrants who arrived in the United States as children and continued their education to register for protected status. To date, nearly 195,000 California residents have successfully registered for DACA.8 In California, DACA registrants with qualifying incomes are eligible for Medi-Cal coverage.
In 2014, a second executive order, which has yet to be implemented, expanded the size of the population eligible for DACA by including adults currently over age 35 who came to the United States as children and, separately all parents whose children are citizens or legal residents (through Deferred Action for Parents of Americans and Lawful Permanent Residents or DAPA). These changes could provide as many as 1.2 million undocumented immigrants in California with deportation relief (Table 1)—the low-income among them may be eligible for Medi-Cal. At the time of this report, 26 states have joined a suit against the federal government to block implementation of these expansions, and the lawsuit could take many more months to resolve.9
California state policy provides for comprehensive Medi-Cal coverage under a PRUCOL (Permanently Residing Under Color of Law) benefit eligibility category for those who qualify and successfully register for deferred action status. This benefit group is paid for entirely by state funds. In May 2015, Governor Brown signaled his intent to continue this policy by including funds in the state budget to cover undocumented immigrants who may register for the expanded DACA/DAPA program.
The funding was dropped from the final budget due to the ongoing lawsuit. Given the current status of expanded DACA/DAPA in the federal courts, it is unlikely that it will be resolved this fiscal year, but may reappear as in issue in the 2016–17 state budget. Even if federal immigration reforms are allowed to move forward, estimates suggest more than one million undocumented residents in California would still remain ineligible for public insurance coverage because they do not qualify for protected status. Policymakers have recently been proposing ways to address this challenge at the state level.
In California’s past two legislative cycles, bills have been introduced to extend full Medi-Cal benefits to residents regardless of their immigration status. None of those bills survived in their proposed form, but expansion of health care coverage policy options are moving forward.
The 2015–2016 budget (SB 75) expanded Medi-Cal to undocumented children beginning as early as May 2016.10 Estimates suggest 170,000 California children could become eligible for comprehensive health benefits as a result of this change.
Other components of proposed legislation included allowing income-eligible, undocumented adults to qualify for full Medi-Cal benefits and allowing those with higher incomes to purchase insurance through the state’s health insurance exchange, Covered California (discussed below). Ultimately these broader coverage expansions did not move forward this year. However, they remain part of active bills and will likely be taken up again when the legislature returns for the second year of the session.
To be eligible for Medi-Cal one must not earn more than 138 percent of the federal poverty level (FPL) (about $33,500 for a family of four). We estimate that about half of California’s undocumented immigrants—1.4 million—fall in that income range (Figure 1).11 We are not able to estimate what share of low-income undocumented residents already have some form of health insurance, but national research suggests rates of uninsurance are highest among low-income undocumented immigrants (Capps et al. 2013).
If proposed reforms go through, nearly all newly eligible Medi-Cal beneficiaries will be covered under local managed care plans, which are organized at the county level and are responsible for ensuring access to care— including cultural competency and an adequate number of providers.12 In addition, changes to state financing for county health programs—intended to offset costs of the Medi-Cal expansion—vary across counties, based on the costs of providing care to those who remain uninsured. These costs would change if undocumented immigrants gain access to Medi-Cal.13
Figure 2 shows our estimates of undocumented immigrants with family incomes below the Medi-Cal threshold of 138 percent FPL, using Covered California’s 19 insurance regions. These pricing regions reflect the differences in insurance costs and health plan networks across the state, as well as regional health insurance markets. Most of them are identical or fairly similar to local Medi-Cal managed care plan service areas.14
We found that low-income undocumented immigrants live in all the state’s insurance regions. Shares of the undocumented with incomes below 138 percent FPL are somewhat higher than the state average in Los Angeles County (58%), the Eastern Region (Imperial, Inyo, and Mono Counties) (64%), the Central Valley–Fresno area (Fresno, King, and Madera Counties) (59%), and Kern County (59%). In comparison, shares of this group are substantially lower in insurance regions throughout the San Francisco Bay Area, including the North Bay (Marin, Napa, Solano, and Sonoma Counties) (43%), Alameda (38%), Contra Costa (44%), Santa Clara (36%), and San Mateo (43%).
Los Angeles County has nearly half a million undocumented immigrants that could benefit from potential expansions of Medi-Cal (Table 2). Los Angeles has long been home to the state’s largest population of undocumented immigrants, but somewhat higher poverty among those immigrants increases the numbers potentially eligible for Medi-Cal relative to other regions. Los Angeles County allows low-income undocumented immigrants to participate in their indigent care program, but comprehensive Medi-Cal coverage would offer expanded access to providers and services.15
Other regions with substantial numbers of low-income undocumented immigrants include the Inland Empire and Orange County, each with more than 100,000. Regions with more than 50,000 low-income undocumented immigrants include Santa Clara County, San Diego County, the Central Valley–San Joaquin area (San Joaquin, Stanislaus, Merced, Mariposa, and Tulare Counties) and the southern Central Coast region (San Luis Obispo, Santa Barbara, and Ventura Counties). In several of these regions, undocumented immigrants are not eligible for services through county indigent programs, which leave safety net providers—such as community clinics and hospital emergency departments—largely responsible for their care. Expanding Medi-Cal access to these populations would ease the pressure for these safety net providers.
In addition to expanding Medi-Cal to low-income undocumented immigrants, state policymakers are also considering options to allow those with higher incomes to purchase insurance coverage through the state’s insurance marketplace, Covered California. Under the ACA, undocumented immigrants are prohibited from purchasing health plans or receiving federal subsidies through state or federal insurance exchanges. Recent proposals would authorize the state to seek a federal waiver to open Covered California to undocumented immigrants.16 If approved, the proposed waiver would allow them to purchase health plans through Covered California, but at full price—no premium subsidies would be available. As we show below, without financial assistance, many undocumented families are likely to find purchasing health insurance unaffordable even if they are able to participate in the exchange.
The ACA established affordability standards in order to determine the level of premium subsidies provided through state and federal insurance marketplaces. These standards vary by income level. Families with higher incomes are expected to pay a larger share of their income for insurance coverage—ranging from about 4 percent for households at 150 percent FPL to a maximum of 9.5 percent for households at 400 percent FPL. While nearly 90 percent of the 1.4 million Californians who have enrolled in health plans through Covered California receive premium subsidies that insulate them from the full price of insurance premiums, under the most recent legislative proposal, undocumented immigrants will bear the full cost.
In Figure 1 above we included breakdowns of income levels for undocumented residents with family incomes too high for Medi-Cal eligibility (roughly half the undocumented population). We base these on the poverty thresholds Covered California uses to determine reduced cost-sharing—250 percent FPL, or about $60,000 for a family of four—and premium subsidy support—400 percent FPL, or about $97,000 for a family of four. According to our estimates, only about one in eight undocumented immigrants statewide have household incomes above 250% FPL, and only about 3% have incomes above 400% FPL. Without premium subsidies to offset the cost, insurance coverage will likely remain out of reach for many undocumented immigrants—particularly those with incomes not far above the Medi-Cal eligibility threshold.
To illustrate this dilemma, Table 3 provides pricing estimates for four insurance regions based on Covered California’s 2016 rates for two household scenarios: a single 25-year-old with a monthly income of $2,000, and a family of four (two undocumented adult parents age 35 and two children) with a monthly income of $4,000. These income levels place both households at about 200 percent FPL. The monthly premiums displayed in the table are for the lowest-priced plan within the tier of coverage.17 These regions were selected to illustrate the range of costs across the state.
According to ACA affordability standards, families with incomes of 200 percent FPL should not have to pay more than 6.3 percent of their income for insurance premiums. However, in Monterey County, a family of four with two undocumented parents and two children would need to spend about 15–20 percent of their monthly income on insurance premiums, and they would still have coverage that required considerable copays for primary and specialty care visits. In Orange or San Joaquin County, the same family would pay closer to 10–15 percent of their income to cover monthly insurance premiums. A younger, low-income single adult would fare slightly better but would still need to invest somewhere between 8 and 16 percent of her income to cover insurance premiums purchased through Covered California without any premium assistance.
Legislative efforts, executive decisions, and public opinion in recent months all suggest interest in expanding health coverage to undocumented immigrants in the state. California’s decision to provide full-scope Medi-Cal to undocumented children reflects that support and is another example of California taking initiative on policy issues involving the undocumented population. A recent study provides strong evidence that the Medi-Cal expansion to children can provide several benefits, including increased future wages and tax contributions as well as improved health and educational outcomes.18
But the vast majority of undocumented residents in California are adults, and expansions of affordable insurance coverage for this group still face major hurdles. Despite the likelihood of continued legislative efforts next year, the costs of covering adults and the uncertainty of federal actions make it difficult to predict success. In the absence of these major federal and state reforms, undocumented adults without health insurance will continue to rely on safety net providers and county indigent care programs for needed health services.
Several counties do not cover the undocumented under their indigent care programs.19 Our estimates suggest nearly 900,000 undocumented residents in California live in counties where they are not eligible for county indigent care programs (Technical Appendix Figure A1). These exclusions place additional strains and financial responsibility on local health care systems—including hospital emergency departments and community clinics— in these regions. Moving forward, it will be important for the state to support local safety net providers and consider providing incentives or direction to counties to include the undocumented under their indigent care programs. Even so, the limited programs and safety net resources currently available to uninsured undocumented immigrants still do not equate to comprehensive health insurance coverage.
Recognizing the benefits of reducing the number of uninsured residents, California policymakers—including the previous Republication administration under Governor Schwarzenegger—sought major coverage expansions well before federal health reform became a reality. Now that the ACA is making more improvements possible, these changes will continue to develop in coming years. Legislative attention will focus increasingly on finding ways to serve those who continue to lack options for affordable coverage. If the policy reforms this report discusses do not succeed, the majority of that population will be undocumented immigrants.
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