Coverage Expansions and the Remaining Uninsured: A Look at California During Year One of ACA Implementation

Policy Implications

As we enter the second year of new coverage under the ACA, information on people’s experience during year one can inform ongoing efforts to extend and improve health coverage in California. While the survey findings can inform a broad range of these efforts, key themes and implications include:

Covering the Remaining Uninsured

Though open enrollment for Covered California is closed, Medi-Cal enrollment is open throughout the year. Analysis of the remaining uninsured population’s income indicates that most fall into the income range for Medi-Cal; thus, ongoing efforts throughout 2015 can bring more people into coverage. In addition, findings related to outreach can inform planning for future Covered California open enrollment periods.

Many low-income, working adults gained coverage in 2014, and ongoing coverage expansions have the potential to reach many more. Adults who gained coverage in 2014 were largely low (below 139% of poverty) or middle (between 139 and 400% of poverty) income, and a majority were in a working family. Further, most who gained coverage were people of color. These findings indicate that coverage expansions are playing an important role in filling gaps in availability of coverage for low-income workers, and expansions may also help long-standing racial and ethnic disparities in access to health care. Like their counterparts who gained coverage, most adults who remained uninsured at the end of 2014 were low or middle income, were in a family with a worker, and were people of color. Extending coverage to the eligible remaining uninsured has the potential to continue efforts to reach those who have historically been left out of coverage. In addition, there is limited evidence that older or sicker adults disproportionately gained coverage in 2014; while some of the remaining uninsured may be hard-to-reach populations, survey findings indicate that this group has a need and desire for coverage. Stakeholders in the state noted that efforts to reach these populations were ongoing.

Cost continues to prevent many uninsured adults from seeking coverage. While many people focused on website glitches and administrative barriers during 2014, uninsured adults say that the reason they still lack coverage is because it’s too expensive, with most not even trying to get ACA coverage, and many who did still saying they are ineligible or believe the coverage is too costly. While some uninsured adults are ineligible for assistance, most can receive some help under the law. Thus, there may be a continuing lack of awareness of new coverage options and financial assistance, particularly among those who are likely eligible for Medi-Cal. Alternatively, it is possible that many are aware of available financial assistance but still believe that coverage is still too costly. Subsidies for Covered California are set at the federal level and are available on a sliding scale, and premium contributions can range from 2% of income for those below 133% FPL to 9.5% of income to those between 300%-400%FPL. Even with financial assistance, people within these higher income groups may find it difficult to afford these premiums, particularly in a high-cost state such as California. Experts reiterated survey findings about cost, noting that, in their enrollment efforts, Medi-Cal was an “easier sell” because enrollees do not pay premiums. Stakeholders commented that, aside from the state providing additional subsidies with its own funds, which was unlikely in the current budget environment, there was little they could do to address affordability issues in Covered California. In addition, the average level of subsidy received by Covered California enrollees ($5,200) implies that most who signed up for that coverage during the first years’ open enrollment had lower incomes.¹ Officials would now like to focus on drawing in middle-income residents, which may be challenging because they will not receive large subsidies. Messages that focus on low-cost or free coverage being available to most uninsured Californians and the importance of having coverage for financial protection may help address this challenge. Other states are pursuing approaches to further lowering cost of coverage for low-income residents, such as developing a Basic Health Plan that covers low-income (up to 200% FPL) residents through state-contracting plans outside the Marketplace² or using an existing Medicaid waiver to provide wraparound subsidies to Marketplace-eligible individuals previously eligible for state-financed or Medicaid coverage.³

Given the relatively high share of the remaining uninsured of Hispanic race/ethnicity, targeted outreach to this group is appropriate. In the early stages of ACA implementation in the state, there was much attention to this population but administrative barriers in reaching them. For example, there were delays in making Spanish-language materials available. Glitches on the Spanish version of the Covered California site were generally addressed only after those on the English site had been resolved. Further, Spanish-language paper forms did not become available until halfway through the open-enrollment period,⁴ which was particularly problematic since research carried out for Covered California showed that non-English speaking families generally do not use the internet.⁵ In addition, many stakeholders felt that Spanish-language outreach materials and advertisements were poorly translated, overall failing to resonate culturally for many individuals within the Hispanic community. Many of the issues with Spanish-language materials have been resolved, and the state has also taken steps to address fears among people with mixed citizenship status families. In December of 2014, Covered California announced a partnership with national and state immigrant rights organizations to inform Californians that personal details disclosed in health coverage applications are secure and confidential.⁶ Data from the second open enrollment period indicate that Covered California’s increased advertising and in-person outreach, targeted at hard-to-reach populations, were effective. Latinos, African-Americans and young adults were all represented in higher proportions compared to the first open enrollment period, with new enrollment of subsidy-eligible Latinos surging by 6 percentage points from 31% in year one to 37% in year two.⁷ Still, even with successful outreach efforts, some Hispanics in the state are likely to remain ineligible for coverage due to the ban on most undocumented immigrants receiving coverage. State efforts have extended limited Medi-Cal services to undocumented immigrants with state-only funding, and some counties have local initiatives to provide coverage to undocumented adults. However, these programs are not available statewide, and currently undocumented adults with incomes above Medi-Cal limits are ineligible for any assistance in most counties.

Community outreach may reach many remaining uninsured. Most adults who did gain coverage in 2014 did not report problems with the plan selection or enrollment process, indicating that enrollment issues do not necessarily pose a barrier to coverage. Most uninsured adults who sought ACA coverage visited the Covered California website or the Medi-Cal agency, with far fewer having contact with a provider, community group, or other outreach worker who may be able to provide one-on-one assistance. Experts note that outreach efforts in 2014 focused on enrolling as many people as possible with the resources available, which meant some hard-to-reach groups were not the primary focus. Many hard-to-reach groups, such as young adults, immigrants, and people with Limited English Proficiency (LEP), may require one-on-one assistance to enroll in coverage. In 2015, outreach resources will shrink, making these efforts more difficult. Given that most remaining uninsured adults are in a working family but work for an employer who is unlikely to offer (or be required to offer) coverage, engaging employers in these efforts may be a promising approach. In addition, experts noted that efforts varied largely across counties, so state-level engagement may be needed.

Providing needed services to the remaining uninsured

Even if outreach efforts are successful, some Californians will continue to lack coverage due to ongoing eligibility gaps or affordability concerns. Survey findings indicate that the uninsured continue to lack adequate access to care and will require assistance in accessing needed health services.

Clinics and health centers remain core providers for the uninsured and will require ongoing support to serve this population. Though uninsured adults are less likely than insured to have a usual source of care, those that do are most likely to name a clinic or health center (versus doctor’s office, HMO, or other location). Many clinics offer services at greatly reduced cost or on a sliding scale relative to income, which makes them affordable options for the uninsured. Indeed, most uninsured adults said they chose their site of care based on affordability. California safety net providers are likely to play an ongoing, core role in serving the uninsured. However, experts note that these providers are also adapting to meet the changing health care environment in California, including becoming “providers of choice” to retain patients as they gain coverage and expanding primary care capacity to meet demand.

While some uninsured are able to navigate the system when they need care, most are not and face serious consequences as a result. Some uninsured people report that they receive regular care, preventive services, and can access care when they need to, but these individuals are the exception: survey results repeatedly indicate inferior access to care for people who lack insurance coverage compared to those who have coverage. In addition, the uninsured face negative financial consequences of having to pay out-of-pocket for care. Experts noted that access to care for the uninsured varies by region within the state. Some areas, particularly rural areas, have provider shortages for both insured and uninsured people. In addition, while some counties provide services to undocumented individuals, not all do, and those that do vary greatly in the scope of these services. Some local initiatives aim to address access barriers among the uninsured by providing insurance or insurance-like coverage, rather than just direct services, for low-income uninsured people. For example, Healthy San Francisco and My Health LA (MHLA) provide limited coverage for uninsured residents of San Francisco or LA county, respectively, regardless of immigration status. Programs such as these could increase access to health services for California’s uninsured and underinsured and could serve as models for other localities. Since people will continue to lack coverage under the ACA, planned efforts to deliver services to those who lack coverage when they need them may be necessary.

Improving care for the insured

While coverage gains have resulted in increased access to care and financial protection, there is still a need to improve affordability and access for the insured. Newly insured individuals may need help navigating the health system, and plans and providers may need further refinement to meet the new need for care.

While most adults with coverage have positive views and experience with their health plan across coverage type, consumer education about health insurance and health care may be needed. Large majorities of insured Californians across coverage types gave their plans excellent or good ratings, most said they understood their plan, and small numbers reported problems with their plans. However, compared to adults who had coverage before 2014, newly insured adults were less likely to understand the details of their plan and, for some outcomes, more likely to report problems communicating with their provider. Experts in the state noted that, during outreach, assistors found that they had to explain very simple concepts about health insurance (e.g., what it means to have a deductible, how a co-payment works, how to pay premiums); they also noted that many people appeared to not understand what their plan covered (e.g., that all plans covered preventive care) or how to use their insurance once they obtained it. They noted that while initial outreach efforts were focused on signing people up rather than educating them about how to use coverage, education about health insurance and health care is the next phase of bringing people into the health care system.

While coverage eases the financial strain of health care, many newly insured adults are in precarious financial situations and still report affordability problems. Compared to adults who remained uninsured in the state, newly insured Californians report lower rates of problems with medical bills and more financial security from usual or major medical costs. Still, cost remains a concern for insured adults. Covered California enrollees are especially sensitive to costs, with most picking their plan based on cost and many saying it is still difficult to afford the premium. Newly insured adults also reported higher rates of financial insecurity about medical bills than adults who were insured before 2014. While premium and cost-sharing subsides are set at the federal level, and Medi-Cal already limits enrollees’ out-of-pocket expenses to very low (if any) levels, continued attention to whether affordability measures in place are sufficient may provide insight into people’s take-up and use of new coverage.

Newly insured individuals may need interventions to help them navigate the system to access needed care. Though newly insured adults report better access than their uninsured counterparts, on some measures, they are more likely to report barriers to care than adults who had coverage since before 2014. For example, newly insured adults were more likely than previously to say it was difficult to travel to care, that a provider would not take them as a new patient, or that they postponed needed care. These barriers could be related to several factors, including difficulty finding a provider, problems navigating the health system and health insurance networks, misunderstanding of how to use coverage and when to seek care, or concerns about out-of-pocket costs. In discussing barriers to care among the newly insured, experts frequently mentioned issues related to network adequacy. In Medi-Cal, low reimbursement rates have made it difficult to contract with providers in some cases, and the state is monitoring networks closely. In Covered California, experts noted that some plans established narrow networks to contain costs and added that some provider directories were inaccurate. Advocates in the state have pushed for legislation to address these issues, and in January 2015, the state issued an emergency regulation to address network issues in Covered California.⁸ In addition, the state is focusing on continuing delivery system transformation in Medi-Cal to provide better coordinated care for people. Under the proposed Section 1115 waiver renewal, the state aims to undertake efforts such as behavioral health/physical health integration, increase attention to social determinants of health and access, system redesign for ambulatory care, and care coordination for high-need populations, among other initiatives.⁹

Attention to coverage transitions and coordinated care may help people from losing coverage. Nearly a fifth of adults who were uninsured in fall 2014 said that they had lost their coverage since the start of 2014. One way in which the state is trying to improve coverage transitions is by enrolling Medi-Cal beneficiaries transitioning from Covered California into the same plan (if available) with no lapse in coverage. In addition, when patients are transitioned to a different plan, they have the right to request continuity of care by being matched to plans that include their primary care physician.¹⁰