Summary: In this blog post, we explore the factors surrounding a proposal to expand Covered California to undocumented Californians by creating a “mirror marketplace.” This would give undocumented Californians, who are prevented by federal law from participating in Covered California, the ability to shop, compare, and enroll in health plans. The creation of a mirror marketplace would lay the groundwork for future policy changes that could allow for premium subsidies. We look at the experiences of Washington State and Colorado, both of which have created policies to offer certain undocumented residents subsidized marketplace coverage.

Many low-income Californians have benefited from the state’s Medi-Cal expansions and efforts to make health care more affordable for the uninsured. The latest Medi-Cal expansion, implemented in January, 2024, applies to low-income undocumented Californians ages 26 to 49. This is the state’s largest health care expansion since the Affordable Care Act (ACA), and means that income-qualified undocumented Californians of all ages are now eligible. Policymakers are now focusing attention on providing access to coverage for the remaining uninsured, including those undocumented Californians above the Medi-Cal income limit, of around $20,800 for an adult individual and $43,000 for a family of four.

Although California’s uninsured population is projected to drop to a record low of 2.57 million under age 65 in 2024, approximately 520,000, or 20.2%, of this group are undocumented and remain uninsured, according to UC Berkeley Labor Center and UCLA Center for Health Policy Research projections. Those in this group are without an affordable offer for employer coverage, ineligible for Medi-Cal due to income, and explicitly excluded from Covered California and ACA subsidies under federal law. The uninsured rate for all California undocumented residents under age 65 is projected to be 27% in 2024, compared to 7% for citizens and lawfully present immigrants.

In 2016, California sought to expand access to Covered California via a Section 1332 State Innovation Waiver, which would have allowed undocumented immigrants to purchase coverage without subsidies. The state, however, withdrew its waiver application in January 2017, just two days before former President Donald Trump’s inauguration. The state legislature is now considering a different approach to the same end, one that does not need federal approval.

A Mirror Marketplace to Close the Gap

In the 2023-24 legislative session, Assemblymember Joaquin Arambula of Fresno introduced Assembly Bill 4, which would expand Covered California to undocumented Californians by creating a mirror marketplace—giving them the same ability as those who currently have access to Covered California to shop, compare, and enroll in health plans. As outlined by the bill, issuers that offer qualified health plans through Covered California would be required to concurrently offer the same plans through the mirror marketplace. This marketplace would establish a structure within which state policymakers could later offer premium subsidies and cost-sharing funds to reduce health care costs for undocumented Californians. Health Access California and the California Immigrant Policy Center, co-chairs of the #Health4All campaign, have requested funds in the 2024-25 state budget to support the creation of a mirror marketplace.

Without subsidies at the onset, most undocumented immigrants would be unable to afford coverage—but this initial step would still make important changes. Mirror marketplace proponents point to California’s value of inclusion to contend that a state agency like Covered California should serve all Californians. While undocumented immigrants are currently allowed to buy coverage with their own money directly from brokers or health plans, the ability to use the portal—to shop and compare the standardized benefits—would provide the same simplified process for selecting a health plan that all other Californians benefit from. The ease of the streamlined approach enables health plan enrollment among those who may otherwise not know where to go or what to do. Even if only a small percentage of those newly eligible have the means and interest to enroll, this would translate into thousands of people in our large state.

Looking to Other States’ Policy Examples

Several states have taken steps to expand Medicaid coverage to undocumented residents, but thus far only Colorado and Washington have implemented legislation to expand their respective health insurance marketplaces to this group. Further, both states have established policy mechanisms that allow qualified undocumented residents to receive subsidies for marketplace coverage.

• Colorado Connect is a mirror marketplace of the state’s existing ACA marketplace (Connect for Health Colorado) and provides partially subsidized “OmniSalud” health plan options to undocumented Coloradans at or below 150% of the federal poverty line. Begun in the 2023 enrollment year, qualified individuals can receive premium subsidies equivalent to those provided under the ACA. Those not eligible for subsidies can enroll in a public option plan through Colorado Connect. Colorado used a Section 1332 Waiver to reinvest savings from other health care initiatives into the Health Insurance Affordability Enterprise (HIAE), which is the funding source for OmniSalud subsidies and other programs.
• Washington used a Section 1332 Waiver to receive federal permission to waive the ACA limitations on enrollment in the Marketplace by certain immigrants, thereby directly expanding access to their state marketplace (Washington Healthplanfinder) to undocumented individuals, beginning in the 2024 enrollment year. State-funded premium Cascade Care Subsidies of up to $250 per month are available to Washingtonians ineligible for federal premium assistance, including undocumented residents with income at or below 250% of the federal poverty level.

Of note, Colorado and Washington are following California in expanding their Medicaid programs but are at different stages of that work. For context, in Colorado undocumented pregnant individuals and their children will be eligible for Colorado’s Medicaid program, Health First Colorado, beginning in 2025. Washington’s Medicaid program, Apple Health, is currently available to undocumented children, pregnant individuals, and those within one year postpartum, as well as some qualified lawfully present immigrants. In July 2024, however, undocumented Washingtonian adults up to 138% of the federal poverty level will be eligible for a Medicaid-like program as part of Apple Health.

As California pursues the creation of a mirror marketplace, the state can learn from the policy and implementation details of Colorado and Washington’s expansions. Both statewide efforts have garnered ample enrollment, displaying the need for such expansions and the willingness of residents to enroll. In Colorado, during OmniSalud’s first enrollment year in 2023, the 10,000-person cap on subsidized enrollment was met in 5 weeks. In 2024, the enrollment cap was expanded to 11,000, and was reached in less than 2 days. There are an estimated 36,000 qualified individuals in the state. As of February 2024, Washington’s first enrollment year with the Immigrant Health Coverage expansion, 2,200 undocumented residents accessed Cascade Care Savings, in line with state expectations.

Considerations for California

While Colorado and Washington have each adopted different structures, both have been successful in expanding coverage to undocumented residents. With Assembly Bill 4, and in discussions at Covered California, California policymakers have proposed a mirror marketplace approach to prioritize greater state autonomy in decision-making—both in the early stages of implementation with the possibility of changing federal administrations, and over the long term as the state may want to make changes, including adding subsidies, without having to seek additional federal approvals. California is in the process of analyzing and resolving implementation questions specific to this approach, such as gauging how much of the existing marketplace infrastructure can be leveraged for the mirror marketplace.

In developing the new policy, California will also have to consider the pros and cons of possible features for mixed-status families. Many California households include both undocumented family members and family members who are U.S. citizens or lawful residents and who may already be eligible for Covered California. In Colorado, although most Omnisalud applications were facilitated by assisters and brokers, applications for undocumented residents who apply on their own are processed through a different application interface than documented family members who are eligible for Connect for Health Colorado. While there are some advantages to two separate applications, including questions being tailored and less invasive for undocumented individuals, some mixed-status families might prefer a more streamlined single application. In Washington, on the other hand, mixed-status families are able to purchase coverage together on the state marketplace with one deductible.

Regardless of how families enroll, mixed-status families may prefer that coverage among family members is as similar as possible. Assembly Bill 4 requires that the plans offered to undocumented residents be identical to the qualified health plans offered to other enrollees. Enrollment of all family members in equivalent plans simplifies access to health coverage and promotes understanding of available benefits.

Down the road, after the mirror marketplace is established, state policymakers may consider offering subsidies to make coverage more affordable. At that time, they will face choices concerning eligibility for subsidies, criteria for determining subsidy amounts, and whether or not to cap enrollment if funding is limited. While undocumented Californians can buy insurance directly from issuers at full cost, the average annual cost of a Silver plan (the benchmark ACA plan) was more than $7,600 in 2023. More than one-third of uninsured and undocumented Californians have incomes below 250% of the federal poverty level, or $37,650 per year for a single individual, making direct purchase of insurance completely out of reach. Colorado’s OmniSalud program provides both full ACA-equivalent premium subsidies and cost-sharing reductions for qualified applicants, though, as mentioned above, enrollment is capped. Washington state has chosen instead to offer partial subsidies—limited to a maximum of $250 per month per enrollee for those ineligible for federal subsidies—with no current enrollment cap. These states’ experiences provide lessons on the likely tradeoffs and calculations California may need to make if it decides to move forward with its own subsidy program.

Conclusion

A mirror marketplace would create a structure within which undocumented and uninsured Californians could enroll in ACA-like health coverage. It could also serve as the foundation of a future state program offering financial assistance to make coverage more affordable and accessible for over half a million undocumented Californians. It would be a key step in advancing California’s progress in moving toward universal coverage and improving equity in access to health coverage for all.

Acknowledgements: The authors would like to thank Miranda Dietz, Lee Che Leong, Adam Fox, Anthony Wright, and Beth Capell for their review of the post. Thanks to Jenifer MacGillvary for editing this post.