This week, the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage held two hearings to continue the conversation about how California can achieve universal health coverage. It is the hope of the committee that these hearings will set the framework that will inform how the Assembly can pursue policy solutions towards universal health coverage that ensures quality, affordable and comprehensive care for all Californians.
Yesterday, experts in coverage and financing of healthcare coverage testified before the Assembly committee, providing an overview of California’s current system, where California is falling short in providing coverage, and the critical role federal investment plays in both maintaining coverage for our most vulnerable, and maintaining the coverage gains made through the implementation of the ACA.
Much of what was discussed included the progress already made under the Affordable Care Act (ACA). With the implementation of the ACA, California had the largest drop in the rate of uninsured, and only 7.1% of Californians lack coverage today. This leaves around 3 million Californians uninsured, with the largest share of uninsured being the undocumented.
Thanks in large part to the ACA, 93% of Californians now have health coverage. California had the largest drop in the rate of uninsured in the nation.
For background, Californians get coverage through our state’s Medi-Cal program (14 million), the federal Medicare program (6 million), and through the private, commercial coverage through the individual, small group, and large group insurance markets (19 million). Even though Medi-Cal covers a third of our state’s population, job based insurance is still the biggest source of coverage for Californians. Half of all Californians have insurance coverage through their employers.
While much of the coverage gains that California had under the ACA was through our Medi-Cal expansion (where over 4 million gained coverage) the ACA fundamentally changed and transformed the individual and small group private insurance markets, which also contributed to the state’s overall coverage gains.
The ACA dramatically improved coverage offerings and set standards, especially in the individual market.
The ACA prohibited insurers from denying coverage or charging more to people with pre-existing conditions, required guaranteed issue, and created strong consumer protections. These changes allowed more Californians to afford and buy coverage. California established the first state-based exchange in the nation, which is Covered California, where Californians can buy coverage from. To date, 1.4 million Californians bought coverage through Covered California, where 90% or 1.2 million receive federal subsidies that help pay for monthly premiums and cost-sharing such as copays and deductibles.
California’s Medicaid program, Medi-Cal, covers over a third of adults and over half of California’s children. Edwin Park, Vice President for Health Policy for the Center on Budget and Policy Priorities (CBPP), provided an overview of Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), dispelled myths about the insolvency of Medicare and Medicaid, broke down who is covered by California’s Medicaid (Medi-Cal) and state CHIP programs, and reviewed the financing of these federal programs.
Experts emphasized that Medicare and Medicaid are cost-effective programs for both the state and the federal government with low administrative costs, and spending for public programs growing more slowly than private insurance on a per-beneficiary basis. Under existing law, Medicaid is financed through significant federal financial participation, where the federal government picks up 64% of California’s Medi-Cal costs. Medicare covers 5.8 million seniors in California and is paid for through a combination of payroll taxes, federal general fund, and premiums on Medicare beneficiaries. The cost-effectiveness of these programs is especially notable, given that Medicare and Medicaid financing is at the heart of federal efforts to repeal the Affordable Care Act, including doing away with the Medicaid expansion and cutting into the base of the Medi-Cal program that predated the ACA. With Congressional Republicans using cuts to these programs as a way to pay for tax cuts for the wealthy and given that the state’s investment in Medicaid is dependent on federal investment, maintaining federal funding for Medicaid will be critical for any universal coverage efforts moving forward.
While California has made significant progress to get comprehensive coverage for 93% of Californians, access issues remain for not only those still uninsured, but for both those currently covered and those who are “underinsured.” “Underinsured” referred to consumers who pay more than 10% of their income on healthcare premiums or more than 5% on deductibles. There are also many Californians that remain uninsured because they are not eligible for job based coverage, Medi-Cal, or Covered California due to many factors such as: the industries they work in do not provide coverage to most workers (e.g.: agriculture, restaurant, retail, and other low-wage industries), affordability, income eligibility limits, and immigration status.
Additionally, even those with job based insurance or Covered California coverage sometimes face large out-of-pocket costs and deductibles on top of their monthly premiums, which further strains their already limited household budgets. In California, a majority of those with job-based coverage have zero deductible coverage, in sharp contrast to the national average where only a quarter have zero deductibles. Workers with job based coverage are seeing increased share of premium as well as increased deductibles and other cost sharing.
People who buy individual coverage continue to face annual premium increases not only because of rising health care costs and they are one year older, but especially because of the Trump Administration’s actions to destabilize the market
Deborah Kelch, Executive Director of the Insure the Uninsured Project (ITUP), advised committee members to think of expansion towards universal healthcare in terms of short-term and the long-term, highlighting that the Legislature can build upon coverage gains made under the ACA’s Medicaid Expansion, continuing to pursue efforts to bring coverage to undocumented adults and address affordability issues for those eligible for private insurance subsidies but who cannot afford premiums.
Laurel Lucia of UC Berkeley Labor Center identified that while all populations saw dramatic drops in uninsured rates, some barriers remain for those who are ineligible for help due to immigration status, or where the affordability assistance may not be enough. Those who continue to remain uninsured tend to be low-income, people of color, working adults between 19-35 years old, and undocumented.
The discussions between the expert panelists and legislators during yesterday’s hearing showed promise and affirmed a commitment by each legislator to addressing and finding real solutions to the problems of our complex and incomplete health care system.
Check back tomorrow for a re-cap of today’s hearing!
Resources:
Click here to find slides and presentations from the hearings
Click here to watch the hearing.