Health Coverage and Care for Undocumented Immigrants
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.
Medi-Cal Expansions for Undocumented Immigrants
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.
Potential New Pathways to Medi-Cal Coverage
Federal immigration policy reform
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.
Table 1. Estimates for undocumented immigrants vary but suggest many could be eligible for expanded coverage options
State legislative efforts
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.
Income Levels Among Undocumented Immigrants
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).
Figure 1. A slight majority of undocumented immigrants would be income-eligible for Medi-Cal
Regional Estimates of Low-Income Undocumented Immigrants
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%).
Figure 2. Poverty levels among undocumented families vary by insurance region
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.
Table 2. Estimates of the undocumented population, by insurance region and income threshold
Participation in Covered California
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.
Table 3. Without premium subsidies, costs of insurance could consume considerable share of household incomes
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.
- Recent studies of state coverage expansions prior to the ACA have reported increased access to health services, decreased financial strain, and improved mental health and self-reported health status among those gaining coverage (Baicker et al. 2013). At a population level, significant declines in mortality rates—1 death avoided for every 830 people gaining insurance— were reported after Massachusetts instituted major coverage expansions in 2006 (Sommers et al. 2014). Other studies have documented spillover effects of high community uninsurance rates on the health care resources and quality available to insured residents (Pagan and Pauly 2006) and a recent study documents the impact of the size of the uninsured population on hospital finances estimating that each additional uninsured person costs local hospitals $900 each year in uncompensated care (Garthwaite et al. 2015).
- Unfortunately, there are few good sources of information for the undocumented population, and, until recently, most available estimates were only at a state or national level. Only a few surveys ask questions approximating immigration status, none with enough respondents to be used on its own to count the undocumented population by state or regional level. Researchers employ estimation techniques to approximate the number, location, and characteristics of undocumented immigrants. In this report, we update our county estimates of undocumented immigrants using IRS tax return data and extend our analysis of tax records to also provide regional estimates of the undocumented population by relevant poverty status thresholds. (See the technical appendices for more details.)
- The Affordable Care Act offers states the opportunity and considerable financial incentives to expand their Medicaid programs to cover non-disabled, low-income adults with no dependent children. Not all states have taken advantage of the Medicaid expansion. California did and has enrolled more than 2 million people in Medi-Cal since October 2013.
- According to estimates by Lucia et al, January 2015, Appendix B, there are 1.06 million undocumented immigrants with income at or below 200% of the federal poverty level.
- Most undocumented immigrants with insurance are covered through their employers, but some likely purchase insurance in the individual market.
- Undocumented immigrants are currently not eligible for the comprehensive set of benefits provided by Medi-Cal (often referred to as ‘full-scope’ Medi-Cal), but they can receive limited, emergency services such as labor and delivery care for pregnant women and limited other services.
- The Medi-Cal program requires applicants to submit a Statement of Citizenship, Alienage, and Immigration Status (MC-13 form) when they apply for benefits. The MC-13 includes a full list of the immigration status categories that quality noncitizens for full-scope Medi-Cal benefits under the PRUCOL eligibility category. One of the categories is immigrants in deferred action status.
- As of March 31, 2015, reported by the Department of Homeland Security, US Citizenship and Immigration Services, Biometrics Capture Systems, CIS Consolidated Operation Repository (CISCOR), April 2015.
- Preston, Julia. 2015. “Federal Panel Lets Injunction against Obama’s Immigration Actions Stand.” New York Times, May 26, 2015.
- Senate Bill 75 is the trailer budget bill for health and is the authorizing legislation that extends full Medi-Cal eligibility to undocumented children under the age of 19. Senate Bill 4 includes additional provisions for implementation of the coverage expansion.
- Technical Appendix B explains how we generate our estimates by poverty thresholds in detail. Briefly, we use zip code level counts of tax filers using Individual Tax Identification Numbers (or ITINs) nearly all of whom are undocumented. We estimate family size using information on filing status and use of the child tax credit. We then use a regression framework to estimate family size across different categories of income. When we combine these estimates of family size and income with our updated estimates of the undocumented population, we are able to calculate the shares of the undocumented population at various income thresholds. Our estimates are generally consistent with other work that uses different methods to profile California’s undocumented immigrants and that use different poverty thresholds (Migration Policy Institute 2015, Marcelli and Pastor 2014, Center for Migration Studies 2015). See Technical Appendix C for more details on comparisons with other sources.
- Cultural competence refers to the ability of health care providers and organizations to provide services that meet the social, cultural, and linguistic needs of patients. One example of this in the Medi-Cal program is the designation of threshold languages, which require translation services and printed information be available for all languages for which there are a certain number of Medi-Cal beneficiaries.
- State funding provided to county health programs changed when the state expanded the Medi-Cal program under the ACA. The legislation (AB 85) redirected state funds based on formula options that vary across different counties. AB 85 also included a provision to review this funding shift if there was federal action on immigration reform, although it is not clear whether that will be considered in this case.
- In most cases, the county or region for Medi-Cal managed care plans is the same as the insurance region used by Covered California. Exceptions include Ventura and Sacramento counties, which are included in multi-county insurance regions under Covered California, but are separate for the purposes of Medi-Cal managed care. In addition, insurance region 1 (covering several small Northern Sierra counties), insurance region 2 (covering the North Bay of Marin, Napa, Solano, and Sonoma), and insurance region 13 (covering Imperial, Inyo, and Mono Counties) are aggregated in different regional groupings under Medi-Cal managed care plans.
- Los Angeles operates My Health LA, a health care program that offers a medical home to participants through primary care clinics, and as of March 2015 provided coordinated care for more than 100,000 low-income, uninsured Los Angeles county residents, most of whom are undocumented.
- The state would seek a federal waiver from the Centers for Medicare and Medicaid Services under section 1332 of the ACA which provides states with flexibility to further expand health insurance coverage under the ACA to fit local needs and preferences.
- There are different categories of health plans that can be purchased on state and federal insurance marketplaces. These categories are labeled as ‘metal tiers’ and determine how individuals and health plans share the costs of care. Plans in different tiers pay a different percentage of the total costs of care for the average patient, with Bronze plans paying the lowest share (60% of costs for the average patient), compared to Silver plans (70%), Gold plans (80%), and Platinum plans (90%). Because they pay the lowest share, Bronze plans are the least expensive in terms of premiums, but also require the highest level of cost-sharing for patients when they need medical care.
- A recent study examines the long-term impacts of public health insurance expansions to children that occurred over the past few decades by linking administrative tax data with health insurance eligibility for children. The findings indicate that children whose eligibility increased paid more taxes, collected less EITC, and had higher cumulative wages. The research also finds evidence of decreases in mortality and increases in college attendance among children whose eligibility for public health insurance increased (Brown, Kowalski, and Lurie 2015).
- Sacramento County and 35 smaller counties that participate in the County Medical Services Program recently changed their indigent care eligibility requirements to cover some services for undocumented residents in those counties.
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The authors gratefully acknowledge Sarah Bohn, Caroline Danielson, Lynette Ubois, Vicky Virgin, and Steven Wallace for comments on earlier drafts of this work. We also thank Chansonette Buck for editorial support.