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Blog Post · April 6, 2023

Video: The Impact of Health Insurance on Poverty in California

photo - Senior Woman at Home Receiving Healthcare

Over the past decade, massive public investments in health coverage have given millions of Californians better access to physical and economic well-being. At a virtual briefing last week, PPIC researchers Patricia Malagon and Caroline Danielson discussed a new report on the contribution of health coverage to household financial resources across the state.

Under the Affordable Care Act (ACA), California has expanded access to Medi-Cal, its Medicaid program. In addition, many low- and middle-income Californians receive subsidies that help them pay for premiums purchased through Covered California, the state’s insurance marketplace. And during the pandemic, temporary changes to Medi-Cal and Covered California also helped expand access to insurance. As a result, California’s uninsured rates have been cut in half.

Because of these public investments, and because health coverage is so costly, it has a big impact on economic well-being across the state. As Malagon explained, millions of Californians rely on public health insurance programs. “Medi-Cal is the largest program by far,” she said. In 2021, 13.5 million Californians were covered. Medi-Cal enrollment increased during the pandemic, partly due to the temporary suspension of eligibility determinations.

“We often see across health and safety net programs the issue of churning—where someone may lose eligibility because they haven’t filed required paperwork,” explained Danielson. During the pandemic, these determinations were paused to prevent people from losing coverage. But churning may resume now that these determinations are starting up again. “Policymakers need to keep an eye on what will happen if people fall through the cracks,” Danielson added.

Covered California has a smaller scope than Medi-Cal: it served about 1.6 million people in 2021, and nine out of ten enrollees received subsides to help them pay for premiums. These subsidies have reduced poverty by a percentage point, which translates to about 345,000 Californians. “This is similar to the impact of the federal Earned Income Tax Credit,” said Malagon.

Danielson said that while she had expected to see that Medi-Cal has a significant impact on family finances, she was surprised by its magnitude. “It was interesting to see how much Medi-Cal really does alter poverty,” she said.

Malagon was struck by the “extremely high” poverty rates for noncitizens, many of whom have immigration statuses that make them ineligible for federal programs. California has expanded Medi-Cal access to all income-eligible children, young adults, and older adults—regardless of their immigration status—over the past several years; in January 2024, access will be extended to all income-eligible Californians. This should have a significant impact on undocumented residents and their families.


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