California counties are restarting annual eligibility renewals for the Medi-Cal program in April, after a three-year pause mandated by the federal government to help people stay healthy and financially stable during the pandemic. Because this renewal process can result in people being dis-enrolled and losing coverage, it will be important to monitor their resumption, which will roll out over the next 18 months.
The eligibility review process—often referred to as redetermination —is required to ensure that program participants meet income criteria, which range from below 138% of the federal poverty line for many adults (about $20,000 for a single person) to below 266% of the poverty line for children (about $80,000 for a family of four). The pause in annual eligibility checks during the public health emergency contributed to a surge in Medi-Cal enrollment; caseloads increased nearly 25% (from about 12.5 million to 15.5 million) between March 2020 and February 2023. Estimates suggest that 2 to 3 million will lose Medi-Cal coverage as redeterminations resume. According to national estimates, more than half will transition to employer-based coverage, but one in five may become uninsured, and this could affect financial well-being across the state.
We looked at this issue in our recent report, which sheds light on the contribution of public health insurance to Californians’ financial stability. We found that the resumption of Medi-Cal redeterminations is likely to lead to a small but noteworthy increase in poverty. National research suggests that nearly half a million current Medi-Cal enrollees could be uninsured for some period of time over the next 18 months. (The rest will either successfully navigate the redetermination process and remain enrolled or transition to other coverage, such as employer-based insurance or Covered California plans.) This could translate into about 115,000 additional Californians in poverty. Across age groups, increases are larger for children and across racial/ethnic groups, Latinos would see the largest rise in poverty.
The estimated poverty increases that result from becoming uninsured are likely to be temporary, since eligible people can reenroll in Medi-Cal when they seek health care, but they may not do so until they have a serious medical issue. Being uninsured is associated with delaying needed health care. Nationwide, almost half of uninsured adults did not visit the doctor in 2021; more than one in five postponed medical care and one in eight waited to fill or never filled a prescription due to costs.
More broadly, “churn”—cycling on and off a program although one is eligible—is a perennial issue in both health and social safety net programs, one that both reduces participation among eligible residents and raises administrative costs at federal, state, and county levels. In 2019, around 75,000 people churned onto Medi-Cal each month. Medi-Cal churn began to decline steadily in May 2020, and there has been no churning since April 2021.
Poverty increases as a result of churning may be mitigated by local, state, and federal efforts to reengage eligible enrollees over the next several months. Federal Medicaid rules have been relaxed, giving states broader flexibility in determining eligibility. The California Department of Health Care Services has been working with counties and other stakeholders for over a year to prepare for the return of eligibility checks. The department has a detailed plan to monitor and minimize churn, including an ambassador program and extensive outreach to engage enrollees and provide updates. In addition, a public dashboard will document monthly redeterminations, renewals, and disenrollments; ideally it will also track transitions to Covered California. Lessons learned from this period may help Medi-Cal and other safety net programs avoid churning in the longer term.
