UC Berkeley Center for Labor Research and Education
UCLA Center for Health Policy Research

Summary

The Affordable Care Act (ACA) has expanded health coverage to millions of Californians and has improved coverage for millions more, but between 2.7 and 3.4 million Californians under age 65 are predicted to still remain uninsured by 2019, after the ACA is fully implemented. Of those predicted to remain uninsured, almost half–between 1.4 and 1.5 million–are ineligible for federal coverage options due to their immigration status.¹

To close this health access gap, the California legislature is considering a proposal (Senate Bill 1005, the Health for All Act) that would expand Medi-Cal coverage to include primary and preventive care, prescription drugs, mental health care, dental care, and other routine health services for all low-income California residents regardless of immigration status.² The expansion of health services would build on existing federal and state funds spent on emergency and pregnancy-related care, available under federal policies that have been in place since the 1980s.³ The policy would also shift services from an episodic fee-for-service delivery and payment model to managed care plans.

California has recently taken a lead in adopting state policies that expand the rights of undocumented immigrants, who make up 9 percent of the state’s workforce and pay more than $2 billion in state and local taxes annually.⁴ The proposed policy would continue that advancement.

This brief finds that the proposed Medi-Cal expansion would involve new state spending, but the cost is modest in comparison to the impact on health and coverage, and the policy also produces savings. Specifically, we find that:

• The net increase in state spending is estimated to be equivalent to 2 percent of state Medi-Cal spending, compared to an enrollment increase of 7 percent in 2015.⁵
• The new spending would be substantially offset by an increase in state sales tax revenue from managed care organizations, in addition to savings from reduced county spending in providing care to the uninsured.
• The net increase in state spending is estimated at between $353 and $369 million in 2015, growing to between $424 and $436 million in 2019.
• Enrollment in Medi-Cal would increase by between 690,000 and 730,000 individuals in 2015, growing to an increase of between 750,000 and 790,000 in 2019. This enrollment would reduce the number of uninsured Californians by approximately one-quarter in 2019.