Employer Sponsored Insurance Rate Remains Stable

Since 2009, employer-sponsored insurance has been on the decline in California. A key question around the Affordable Care Act (ACA) was whether the reforms would further erode employer-sponsored insurance coverage. A recent survey by the California HealthCare Foundation finds that employer-sponsored insurance in the state has remained stable from 2013 to 2015. Worker eligibility for employer-sponsored insurance also remained stable, and even increased among some groups. However, the percentage of eligible workers who chose to enroll in employer-sponsored insurance declined from 86.4% in 2013 to 80.2% in 2015, bringing California closer to the national average take-up rate of 79%. This decline could be caused by the availability of alternative coverage options through Medi-Cal and Covered California.

Costs and Eligibility Are the Biggest Barriers for the Uninsured

Two-thirds of uninsured Californians were eligible for coverage in 2014, but most said they did not enroll because of the cost. The remaining third were ineligible for coverage under the Affordable Care Act due to their immigration status, according to a study by Berkeley’s Center for Labor Research and Education and the UCLA Center for Health Policy Research. The study finds uninsured Californians fall into four groups:

  1. Undocumented residents 32%: Residents who don’t qualify for health coverage under the Affordable Care Act are predominantly low-income, Latino, and have limited English proficiency.
  2. Those eligible for Medi-Cal 28%: Adult citizens and legal immigrants with incomes at or below 138% of the federal poverty level and children at 266% of the poverty level.
  3. Those eligible to buy health coverage through Covered California with a federal subsidy 31%: Citizens and legal immigrants with incomes from 139% to 400% of the poverty level.
  4. Those eligible to buy health coverage through Covered California without a federal subsidy 9%: Citizens and legal immigrants with incomes above 400% of the poverty level, which disqualifies them from federal subsidies.

The largest percentage of citizens and legal immigrants (46%) cited cost as the main reason for being uninsured. Miranda Dietz, a researcher at UC Berkeley said, “We’re a relatively high cost-of-living state. It’s no wonder that some Californians, who may be unaware they qualify for health subsidies and other programs, still find the cost of health insurance out of reach.”

California has more than 1 million undocumented immigrants who don’t benefit from the Affordable Care Act. Nadereh Pourat, director of research for the UCLA center said, “Hundreds of thousands of men, women and children, not to mention the workers who power California’s economy, are one health emergency away from potential financial ruin because they lack insurance. From an economic perspective, it’s bad business to rely on workers and then not offer them equal health protection. And from a humanitarian perspective, it’s just wrong.”

UCLA and UC Berkeley also collaborated on a related on Medi-Cal study. About one-third of those who were uninsured, but eligible for Medi-Cal thought they were ineligible or didn’t know if they were eligible. Another 20% said they were getting insurance, reflecting a major backlog during the first year of processing applications, which has largely been resolved since then. Both studies were funded by the Blue Shield of California Foundation. The study notes that many previously uninsured Californians have enrolled for coverage, but fully covering those still uninsured will require changes in policy to improve affordability and expand eligibility.

HHS to require proof of eligibility for late health plan enrollment

People who want to use HealthCare.gov to subscribe to a health insurance plan or change plans outside the open enrollment period must now prove that they are eligible, marketplace CEO Kevin Counihan said. The requirement is “a much-needed step in the right direction,” said AHIP spokeswoman Clare Krusing. The New York Times (free-article access for SmartBrief readers) (2/24)

State exchanges to rely on honor system for now

States running their own Affordable Care Act health insurance exchanges will be allowed to wait until 2015 for comprehensive verification of purchasers’ income and insurance status under new HHS rules. Federally run exchanges will randomly verify applicants’ eligibility status in 2014, but state-run exchanges may rely on applicants’ statements until 2015, and they may randomly check income status in 2014 rather than checking income for all applicants. Some health policy experts noted the relaxed verification could lead people to overstate their earnings in states that did not expand Medicaid so they are eligible to obtain subsidized coverage on public exchanges. Reuters (7/8) , The Hill/Healthwatch blog (7/8)

IRS issues draft Affordable Care Act subsidy reporting form

The Internal Revenue Service issued draft regulations addressing how exchange operators will send tax-credit eligibility data to the IRS and update consumers on the communication. The IRS also issued guidance on how officials will interpret insurance tax-credit rules and how to handle employer-sponsored coverage that does not operate with a Jan. 1 start date. National Underwriter Life & Health (7/1

Last Updated 09/22/2021

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