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Taking Stock: Californians’ Insurance Take-Up Under the Affordable Care Act

Miranda Dietz
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California has seen a remarkable decline in its uninsured rate over the first two years of Affordable Care Act (ACA) implementation. California experienced the largest percentage point decline in the uninsured rate of any state—a drop from 17.2% in 2013 to 8.6% in 2015 according to the US Census Bureau. This historic accomplishment represents an increase of 3.2 million more Californians who now have health insurance coverage. Nevertheless, as we recently estimated, some 3 million Californians are projected to remain uninsured, almost 60% of whom are undocumented and ineligible for the expanded coverage and financial assistance available under the ACA. This blog post assesses the progress the state has made in getting those who are eligible to take up the newly available ACA options.

Take-up is sometimes measured as the percentage of all those eligible for a particular source of coverage who enroll in that source of coverage. Because so much policy focuses on those who remain uninsured, we use a measure of take-up that reflects those who have enrolled as a share of those who have enrolled plus those who were eligible but remained uninsured: for example, take-up in Medi-Cal excludes those who are eligible for Medi-Cal but chose not to enroll and instead took up employer coverage.

Medi-Cal

Take-up under the ACA in Medi-Cal, California’s Medicaid program, has far exceeded predictions. According to administrative data, net enrollment in full-scope Medi-Cal has increased by 4.2 million from the end of 2013 to June 2016. This growth accounts for 28% of the national growth in Medicaid, compared to the state’s 12% share of the U.S. population. The state with the next largest increase in enrollment, New York, saw an increase of less than 750,000 people.

Just how high is the take-up rate in Medi-Cal? Using preliminary results from our CalSIM model version 2.0, we estimate that approximately 190,000-430,000 Californians ages 0-64 who are income eligible for Medi-Cal will be uninsured in 2017. Among people without another source of coverage, the take-up rate in Medi-Cal is above 90% (estimating a more precise take-up rate for Medi-Cal is difficult due to inconsistencies between administrative and survey data). This includes those Californians who were eligible for Medi-Cal prior to the ACA, but it is much higher than the take-up rate in 2009, when an estimated 68% of adults age 19-64 and 84% of children eligible for Medi-Cal took up coverage, based on data from the Urban Institute. Medi-Cal take-up is now as high as the take-up of Medicare: about 94% of people over the age of 65 have Medicare, and of those who have no other source of coverage 99% are enrolled, according to the 2009 California Health Interview Survey (CHIS) and 2015 American Community Survey (ACS). Similarly 96% of those eligible for employer sponsored insurance but without another source of coverage take up such coverage (2014 CHIS).

What might account for the dramatic increase in the Medi-Cal take-up rate? The ACA included a number of policy changes and simplifications to make it easier to obtain (and maintain) coverage, including requiring a single application for Medicaid (Medi-Cal) and Marketplace coverage (Covered CA), using electronic data sources to confirm eligibility whenever possible, and eliminating the asset test—a cap on the assets low-income people could have and still qualify for Medicaid. California also got a head start on Medi-Cal enrollment by expanding coverage early through county-based Low Income Health Programs. In addition, extensive outreach and enrollment efforts were conducted by multiple stakeholders across California, funded in part by private foundations (the California Endowment and Blue Shield of California Foundation) and federal matching dollars, and supported by a committed workforce providing application and enrollment assistance. The state has also gone beyond federal requirements in adopting more inclusive Medi-Cal eligibility policies, especially for certain groups of immigrants.

Covered California with subsidies

Take-up of subsidies among those eligible has also been strong; we estimate that approximately 320,000-460,000 Californians ages 0-64 who are eligible for subsidies will be uninsured in 2017, which would mean a take-up rate in Covered California among those eligible for subsidies and without another source of coverage of between 73% and 80%. For comparison, Kaiser Family Foundation estimates that 79% of the potentially subsidy eligible population in California had enrolled as of March 2016, among the highest of any state, and above the national average of 64%.

California’s high enrollment of those eligible for subsidies can be attributed to a number of factors including the decision to create a state-based Marketplace, extensive outreach and enrollment efforts including a focus on particular demographic groups and regions, and multiple plan choices for consumers in most regions. In California, government, insurers, community-based organizations, providers, and other stakeholders worked together to make the Affordable Care Act successful.

Why is take-up in subsidized Covered California coverage not as high as for Medi-Cal, Medicare, and employer sponsored insurance? The most common answer is simple: people think they can’t afford it. Some may not know that they are eligible for financial assistance, but even when people do know and are eligible for financial help, coverage can still seem out of reach. The thresholds for subsidies are determined based on federal poverty levels (FPL) and do not take local cost of living into account. For people in high cost-of-living states like California, the federal subsidies may be far below what they need in order to fit health insurance into their family budget.

Individual market / Covered California without subsidies

Some citizens and lawfully present immigrants are not eligible for financial assistance through Covered California. They may have income above 400% FPL, be ineligible for subsidies due to an offer of affordable employer sponsored insurance, or face premiums through Covered California that are below their expected contribution level (which can be as high as 9.66% of family income) and so they do not receive a subsidy. We estimate that between 460,000 and 820,000 Californians ages 0-64 will remain uninsured in 2017 and fall into this category. This means the take-up rate for this group is between 58% and 71%. Since many of these individuals have income less than 400% FPL (or approximately $48,000 for a single individual), and none have financial assistance to pay for coverage, affordability concerns are likely the most common barrier for this group as well.

While take-up rates vary, California has made significant progress in enrolling people in the newly available health insurance options under the ACA and reducing health coverage disparities by income level. To maintain these take up rates, the state must continue its efforts at outreach and enrollment as people’s incomes, ages, and insurance offers change and they transition in and out of various eligibility categories. And there is more to do to enroll those who are eligible but uninsured, especially to make coverage more affordable.