How Immigration Changes, Proposal for Undocumented Could Affect Medi-Cal

University of California researchers last week determined there are between 2.7 million and 3.4 million people without health insurance in California — about 1.5 million of them undocumented.

Using back-of-the-envelope math, roughly half the state’s uninsured are undocumented and the other half are eligible for coverage and just not enrolled.

Laurel Lucia, an associate policy specialist focusing on health care policy at UC-Berkeley’s Institute for Research on Labor and Employment, is lead author of the Jan. 29 report written jointly with the UCLA Center for Health Care Policy Research.

“Our report confirms the undocumented are the largest segment of the uninsured population,” Lucia said. “As for the others, there’s still much more work that needs to be done to cover them. But California does have the potential to cover all of its low-income residents.”

The number of uninsured in California has been cut by about half in the past two years, in part because of the expansion of Medi-Cal benefits. The last big group of uninsured is the undocumented, who are excluded from participating in state health benefit exchanges like Covered California. Medi-Cal is California’s Medicaid program.

The number of the undocumented in California may contribute to higher numbers of those eligible-but-uninsured people, too — because they may be related, literally. Researchers believe many people in families with mixed immigration status have foregone coverage — even when eligible for it — out of fear of exposing their relatives to immigration authorities.

Two recent developments could change that picture dramatically.

  • President Obama issued an executive action in November that will allow more undocumented people to attain legal status, called deferred action status. More broadly, people with that status are referred to as “PRUCOLs” — Persons Residing Under Color of Law. That deferred action status not only takes them out of the shadow of hiding from immigration officials but can make them eligible for government services such as Medi-Cal.
  • A bill in the Legislature, SB 4 by Sen. Ricardo Lara (D-Bell Gardens), would provide primary care health services to the undocumented in California.

Details of the Senate bill are still being worked out, including how to pay for it. A big question mark still is the estimated number of people it would likely cover — and, therefore, the estimated cost of the program.

To some degree, those estimates are dependent on how many California PRUCOLs take advantage of the executive order. The initial estimate was for about 700,000 people to sign up for coverage under SB 4 in the first year — but that projection was made before the executive order took effect.

If hundreds of thousands of Californians attain deferred action status, it would shift the number of people able to take advantage of SB 4 and lowers the cost, potentially by a lot.

It’s not a simple number to determine, though. Some people who might get deferred action status already have private insurance, and some make too much money to qualify for Medi-Cal. On the other side of the ledger, there’s the question of how many uninsured-but-eligible Californians who are related to PRUCOLs might now sign up for Medi-Cal because they no longer have to worry about members of their mixed-status household.

On top of all of that, attaining deferred action status for some of the undocumented could mean a bump up in income that would move them out of Medi-Cal coverage. Or it could mean landing a job that provides insurance — all of which could actually reduce the number of people enrolling in Medi-Cal.

You could look at the pool of uninsured and undocumented in California as a giant, complex stew. It’s hard to spoon out the meat without drawing out some carrots, celery and broth. If you’re ladling from one pot to another, you’re going to have some carryover of ingredients, whether you intended to or not.

Basing Estimates on Previous Status Programs

A presidential executive order in 2012 created DACA status (Deferred Action for Childhood Arrivals), granting a two-year work permit to immigrants who entered the country before their 16th birthday and before 2007. That was expanded in November 2014 to include parents (Deferred Action for Parents of Americans and Lawful Permanent Residents, also known as DAPA), and that expanded process started earlier this year.

The Pew Research Center estimates 1.25 million undocumented people in California overall (including DACA status starting in 2012) could be eligible for deferred action status.

In the past three years, there were about 300,000 people eligible for DACA status, and about 190,000 people enrolled. That is over a three-year period, but it’s an indicator for how many people might enroll in the expanded DACA and DAPA programs.

As a very general estimate, Lucia said, there are about 950,000 Californians newly eligible for deferred action status. And if you apply a similar rate of enrollment DACA had over the past three years, there are about 500,000 people with new deferred action status in California — for a grand total of about 700,000 PRUCOLs in California. 

“In broad terms, how many will take advantage of it and how many will enroll, that’s an important question,” said Ken Jacobs, chair of the UC-Berkeley Center for Labor Research and Education. “So many of the details aren’t fully determined.”

One thing that is clear, he said, is that anyone signing up for deferred action status — and becoming eligible for Medi-Cal in the process — will not need to be part of the proposed undocumented legislation.

“The key point is, with deferred action status, the number of Medi-Cal-eligibles will be reduced, so the cost of SB 4 will be lower,” Jacobs said.

Lower Cost Makes Coverage Bill Easier Sell

Lucia said about one-fourth of California’s 700,000 PRUCOLs likely already have some kind of employer-based health insurance.

Another sizable segment won’t qualify for Medi-Cal because their incomes are too high, so that cuts the number of Medi-Cal-eligibles even further, to maybe half of that original number.

But hundreds of thousands of people with deferred-action status could be significant, given the original estimate of 700,000 who might be affected by SB 4. A lower utilization number means lower cost, and that would make SB 4 a much easier sell in the Legislature.

“The state cost of Medi-Cal would be lower than we estimated last year because of those who would be eligible for expanded DACA or DAPA,” Lucia said.

Researchers plan to issue a policy brief in the next month on the demographics then later apply those numbers to a cost analysis, Lucia said.

“You should be able to make some deductions based on the policy brief,” Lucia said.

“But it’s important not to put too much stock in these back-of-the-envelope estimates,” she cautioned, “because we just don’t know a lot yet. There are so many variables.”

Timeline Tricky for State Legislation

Lucia said the success of the recent expansion of deferred action status could vary widely. It could have greater enrollment than DACA did over the past three years because work permits may be a bigger motivator for adults than they were for younger people, she said.

Or it could have lower enrollment numbers for a number of reasons: the $465 application fee, a requirement to be up-to-date on taxes, along with other paperwork challenges for this round of deferred action status.

One of the tricky parts of SB 4 passage may be the timeline of it.

The big question for most legislators — and Gov. Jerry Brown’s (D) administration — is what the cost might be. Researchers are working on estimated utilization and cost, but that’s a bit of a moving target, with a lot of shifting variables.

Legislation needs to go before committees now, though — and, in particular, through the Committee on Appropriations in both houses. Bills are finalized and passed over the summer. Budget negotiations start now and finish in June. Time is relatively short for all of that.

No matter what the final number of users and Medi-Cal costs to the state ends up being, the actual spending on health care for the undocumented population will be lower than what it is now, Lucia said.

“The net state cost will go down,” Lucia said.

“The state is already paying for the most costly services — hospital admissions, emergency department services,” she said. “And there also will be savings in county costs for caring for the uninsured.”

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