RELEASE: New UC Berkeley Report Identifies Policy Options for Narrowing California’s Coverage Gaps

UC Berkeley Labor Center

For Immediate Release

CONTACT: Penelope Whitney,, cell: 415-515-4546

Affordability is a barrier to enrollment and care for those purchasing insurance individually

Berkeley — California’s effective implementation of the Affordable Care Act (ACA) has led to the largest drop of the uninsured of all 50 states, with 93 percent of state residents now covered by health insurance. In spite of these coverage gains and improved affordability for many, individuals eligible for Covered California make up the state’s second largest group of uninsured after undocumented residents. Many Californians enrolled in individual market coverage also struggle to afford premiums and out-of-pocket costs.

In a new report, Laurel Lucia, director of the Health Care Program at the UC Berkeley Labor Center and Ken Jacobs, chair of the Labor Center, detail policy options that state policymakers could consider in order to improve affordability. “The research shows that these policies could move the state closer to universal coverage” says Lucia. “The policies would also reduce costs for many who already have insurance and improve their access to care.”

This report first summarizes the evidence about affordability concerns – the top reason that those eligible for Covered California lack insurance, regardless of income level. Even with ACA subsidies, combined premium and out-of-pocket spending can exceed 10 percent of income for some Californians with typical medical use. The state’s high cost of living makes it more difficult for families to cover housing, health care, and other basic needs. The income limit for ACA premium assistance is four times the federal poverty level, which is equivalent to five times that level in California and six times in San Francisco.

High out-of-pocket costs can be a barrier to care. More than one-third of Covered California enrollees with income between $24,120 and $48,240 for a single individual are enrolled in Bronze plans with a $6,300 individual annual deductible. “Most people in this income range don’t have the savings to cover the cost if they incur high medical expenses,” says Lucia.

To address the affordability concerns of those with individual market insurance and to increase enrollment among the uninsured, state policymakers could consider:

  • Adding state premium subsidies to the federal premium subsidies already provided under the ACA to further reduce enrollees’ premium contributions;
  • Increasing financial assistance to reduce deductibles, co-payments, and other cost sharing and making more Californians eligible for assistance;
  • Limiting the percentage of income spent on premiums for Californians who earn too much for ACA premium assistance;
  • Extending eligibility for state-funded premium and cost sharing subsidies to children and spouses affected by the ACA “family glitch”; and
  • Establishing a state reinsurance program to lower premiums.

These policy options could also help to counteract the reduction in individual market enrollment and increase in premiums expected to occur in 2019 with the elimination of the ACA penalty for lacking insurance.

The policy options were developed based on analysis of affordability concerns in California’s individual market. They also reflect a review of related policies in other states and localities, including programs in Massachusetts and Vermont that reduce premium and out-of-pocket costs for certain individuals.

Download the report here.

This research was supported by the California HealthCare Foundation, based in Oakland, California.


The Center for Labor Research and Education (Labor Center) is a public service project of the UC Berkeley Institute for Research on Labor and Employment. For more about the Labor Center, visit