Millions In California Will Lose Health Coverage If Stopgap Measures Expire

Because of increased federal financial help from the American Rescue Plan, for instance, two out of every three state residents who enrolled through Covered California were able to get policies that cost $10 or less per month. The state-based insurance marketplace reported a record enrollment of 1.8 million after at the conclusion of this year's open enrollment period, up from 1.6 million for the comparable period a year earlier.

"The law lowered premiums and boosted enrollment — with the biggest beneficiaries being communities of color, lower-income Americans and many in the middle class who got help paying for their coverage for the first time," said Peter V. Lee, executive director of Covered California. "In the absence of federal action to extend these policies this year, people in California and across the country will have their access to health coverage and care dramatically reduced."

Even middle-income Californians saw a significant benefit, with their policy costs dropping by hundreds of dollars because of the Biden Administration's push to ensure that every American would have coverage if they were to contract COVID-19. The federal financial help will no longer be available when 2022 ends.

Californians who depend on Medi-Cal coverage also will be affected if another pandemic-related measure ends as expected in mid-April.

As part of the Families First Coronavirus Response Act, Congress required that states provide "continuous coverage" for beneficiaries of Medicaid coverage, known as Medi-Cal in California, during the public health emergency declared by President Biden.

The emergency order will expire on April 16, ending a two-year freeze on enrollment that ensured state residents with Medi-Cal coverage would not be dropped because of changes in income, access issues or failure to meet a number of other eligibility requirements.

Anthony Cava, a spokesman for the California Department of Health Care Services, said there's always a chance that the public health emergency could be extended, but even if it isn't, the federal agency that runs Medicaid has told state officials that it will give them up to 12 months, plus two additional months due to renewal processing policies, to return to normal eligibility and enrollment operations.

This means that counties will be able to redetermine Medi-Cal eligibility for their beneficiaries on a rolling basis, based on their next annual renewal date, rather than having to touch all the beneficiaries at once, Cava said.

"To minimize the risk of individuals losing coverage, the Department of Health Care Services...is currently engaged in various outreach efforts to keep beneficiaries informed about their Medi-Cal coverage and to encourage beneficiaries to provide their local county Medi-Cal offices with updated information, including reporting when they have a change in address," Cava said. "As part of our outreach efforts, DHCS sent a notice to all Medi-Cal households in December 2021 to encourage beneficiaries to report updated contact information."

California's Medi-Cal population grew in 2021

DHCS reported in December that the Medi-Cal population was nearly 14.28 million In September 2021, up 13.7% from about 12.56 million in February 2020, the month before state shelter-in-place orders were instituted.

Among the 14.28 million beneficiaries in September, 49% identified as Hispanic, 17.5% as white, 9.5% as Asian/Pacific Islander and 7.1% as Black.

Experts have said that, because of longstanding, structural racism, people of color are more likely to experience the type of volatility and instability in their employment and housing that leads people to apply for Medi-Cal.

The end of the public health emergency means that a disproportionately high number of Latinos and African Americans will face losing health coverage when they need it most, wrote Manatt Health research consultants Patricia Boozang and Adam Striar in a report prepared for the Robert Wood Johnson Foundation.

They pointed out that individuals who are eligible for Medi-Cal often lose coverage when it's time to re-certify their eligibility because of administrative barriers. For instance, Striar and Boozang wrote, they may not have online access needed to renew coverage, may not understand complicated paperwork or may not possess the necessary documents because their housing situation or health needs are precarious.

As a result, there could be an incredible amount of churn in the numbers of both Medi-Cal beneficiaries and Covered California beneficiaries amid a pandemic that has killed more than 85,000 state residents.

A Covered California analysis has found that, if the subsidies provided by the American Rescue Plan were allowed to expire, enrollees who currently earn less than 400% of the federal poverty level — $52,000 for a single person and $106,000 for a family of four — would face monthly premiums increases of 71% for 2023.

Some health premiums could double

Researchers at the state-based insurance marketplace said that 1 million Californians — earning between $17,775 and $32,200 a year for an individual and from $36,570 to $66,250 for a family of four — would see their health insurance premiums more than double.

The American Rescue Plan made a number of changes that increased affordability for working-class and middle-class Californians. Among them:

— It increased the amount of financial help available for all consumers.

— It capped health insurance premiums at 8.5 percent of household income.

— It ensured that consumers who earned less than 150 percent of the federal poverty level ($19,230 for an individual and $39,750 for a family of four) paid no premiums on plans in the silver tier. Silver plans cover 70 percent of medical expenses.

— It also extended financial help to middle-income consumers, those who earn more than $51,250 as an individual or $106,000 for a family of four. They previously had been ineligible for assistance.

"While lower-income consumers would still be getting federal tax credits, many of those who would see their premiums double will be priced out of the coverage they want and need," Lee said. "A total of 1 million Californians, those who can least afford it, will be hit the hardest if these critical subsidies are allowed to expire."

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