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California and the ACA’s Medicaid expansion

Medi-Cal is the largest Medicaid program in nation, covering nearly 14 million people. Children and young adults are eligible regardless of immigration status.

ACA’s Medicaid eligibility expansion in California

California’s Medicaid program is called Medi-Cal. It covered nearly 14 million people as of summer 2021. That means about one-third of Californians rely on the program to get health insurance coverage.

California has accepted federal Medicaid expansion

  • 13,981,096 – Number of Californians covered by Medicaid/CHIP as of June 2021
  • 6,225,715 – Increase in the number of Californians covered by Medicaid/CHIP fall 2013 to June 2021
  • 58% – Reduction in the uninsured rate from 2010 to 2019
  • 66% – Increase in total Medicaid/CHIP enrollment in California since Medicaid expansion took effect

Undocumented immigrant children and young adults are eligible for Medi-Cal

Undocumented immigrant children gained access to California Medicaid starting in May 2016. And as of January 2020, that eligibility applies to young adults through the age of 25. As long as they qualify based on household income, children and young adults can enroll in Medicaid in California regardless of their immigration status.

Gov. Jerry Brown signed SB4 into law in October 2015, and it eliminated the immigration status requirement for Medicaid eligibility for California residents 18 and under. Roughly 119,000 kids were covered under this program as of mid-2021. It had been as high as 134,000 as of 2017, but enrollment started trending lower after that, potentially due to the Trump administration’s approach to immigration.

In 2019, California enacted SB104, which extends Medicaid eligibility to young adults (ages 19-25) who are eligible based on their income, regardless of their immigration status. So in 2022, Medi-Cal is available to young adults in California with income up to $18,754 for a single person, and up to $31,781 for a household of three.

SB104’s Medicaid expansion to young adults without immigration documentation took effect in January 2020, and the state expected roughly 138,000 young adults to potentially gain coverage, with up to 90,000 expected to enroll in 2020. As of September 2021, there were 96,193 young adults enrolled in Medi-Cal under SB104’s rules.

California is using state funds to cover undocumented immigrants under Medi-Cal, so undocumented young adults are not receiving a federally funded benefit (Medicaid is jointly funded by the state and federal government, but states can opt to add services or eligibility categories that are fully funded by the state).

California had previously considered allowing undocumented immigrants to enroll in full-price private plans through Covered California (the state’s health insurance exchange), but that has not come to pass. SB10, which passed during the 2016 legislative session, initially called for allowing adults age 19 and over to enroll in Medi-Cal without regard for immigration status. But the final version of the bill instead called for the state to request a 1332 waiver from HHS to allow undocumented immigrants to enroll in unsubsidized qualified health plans (QHPs) through Covered California (without a waiver from HHS, this isn’t possible, as the ACA requires all exchange enrollees to be legally present U.S. residents, regardless of whether they receive any subsidies).

The state did submit a waiver to HHS, but on January 18, 2017, two days before Trump’s inauguration, the state withdrew the waiver, noting that they didn’t trust the Trump administration to ensure “people’s privacy and health” in implementing the waiver. They were concerned that the Trump administration would use Covered California data to deport people and separate families. State Senator Ricardo Lara, who had championed SB10, asked for the waiver withdrawal, calling it “the first California casualty of the Trump presidency.”

Rules implemented to limit California Medicaid estate recovery

Federal poverty level calculator

Longstanding federal regulations, which predate the ACA, require states to “seek recovery of payments from the individual’s estate for nursing facility services, home and community-based services, and related hospital and prescription drug services” for any Medicaid enrollee over the age of 55. But states can choose to go further, using estate recovery to recoup any Medicaid costs.

This has become more of a problem since the ACA Medicaid expansion took effect in 2014, as people are now funneled into California’s Medicaid system in much greater numbers than they used to be (this is the case in every state that has expanded Medicaid). Covered California enrollees with income up to 138% of the poverty level are directed to Medi-Cal, regardless of the value of their assets (there’s no asset test for subsidy eligibility or Medicaid coverage under the ACA). As a result, some families began receiving bills from California’s Medicaid program after their loved ones passed away, including bills to cover the cost of payments that the state made to managed care plans, even if the deceased didn’t use any medical services.

California S.B.826, the Budget Act of 2016, included a provision to bring Medi-Cal estate recovery into line with federal rules. For people who pass away January 1, 2017 or later, the state only uses estate recovery to recoup long-term care costs that were incurred by Medi-Cal. But that includes In-Home Supportive Services, which the state did not previously recoup through estate recovery.

In addition, estate recovery is now limited to assets that were owned by the deceased at the time of death and are subject to probate. For people who passed away prior to 2017, the state could seek to recoup costs from any assets owned by the deceased at the time of death.

Minnesota implemented similar legislation in 2016, but unlike California, they made their limits on estate recovery retroactive back to January 2014.

Who is eligible for Medicaid in California?

Medicaid is a joint federal-state program. The federal government establishes broad guidelines, and each state develops specific rules and policies that shape how the program is administered for its residents.

In terms of who is eligible for coverage, the federal government requires states to cover certain populations. States must cover mandatory populations to receive federal funding. States can also cover optional populations and receive federal funding.

The federal government establishes baseline levels for eligibility within each covered population. States can set higher levels if they wish, and the income limits vary significantly from state to state.

California has generous standards for covering various Medicaid populations. Children from birth through age 18 are covered with family income levels up to 266% of FPL. Pregnant women qualify with incomes up to 213% of FPL, and non-elderly adults — both those with and without dependent children — are covered up to 138% of FPL (note that all of these limits include a built-in 5% income disregard that’s used for MAGI-based Medicaid eligibility determinations).

MCAP (Medi-Cal Access Program) is also available to pregnant women with household incomes between 213% and 322% of FPL (for Medi-Cal and MCAP eligibility, a pregnant woman counts as two people when determining household income relative to the poverty level). MCAP enrollment was integrated with Covered California in October 2015.

How does Medicaid provide financial assistance to Medicare beneficiaries in California?

Many Medicare beneficiaries receive Medicaid financial assistance that can help them with Medicare premiums, lower prescription drug costs, and pay for expenses not covered by Medicare – including long-term care.

Our guide to financial assistance for Medicare enrollees in California includes overviews of these programs, including Medicaid nursing home benefits, Extra Help, and eligibility guidelines for assistance.

How do I enroll in Medicaid in California?

You can visit California’s Department of Health Care Services website to check if you are eligible to enroll in Medicaid.

The application process for Medicaid in California is integrated with Covered California, the health insurance marketplace. You can apply:

Medicaid expansion has played a key role in reducing the uninsured rate

California adopted Medicaid expansion through the Affordable Care Act (ACA). Enrollment began in October 2013, with coverage effective in January 2014.

According to US Census data, the state’s uninsured rate stood at 17.2% in 2013, and had dropped to 7.2% by 2017 (it remained at roughly that level in 2018 and in 2019).

Medicaid expansion has played a key role in reducing the state’s uninsured rate. Medi-Cal enrollment has grown by more than 5.1 million people since 2013. Much of that growth is due to the expansion of Medicaid eligibility to cover adults with income up to 138% of the poverty level. And the COVID pandemic has pushed Medicaid enrollment higher nationwide, particularly in states like California that have expanded Medicaid.

Funding for Medi-Cal

Medicaid expansion has raised concerns about overburdening the health care system with a flood of new patients and challenging the financial viability of the program. An Oregon study released in early 2014 reinforced those concerns. The study showed more use of primary care and about a 40% increase in emergency room visits among the newly insured. However, a more recent study by the UCLA Center for Health Policy Research found that the spike in emergency room use was temporary — dropping by two-thirds after two years. The study also found that primary care use did not climb in response to the drop off of emergency room use — meaning overall utilization tapered off. Lead author Jerry Kominski summarized the study this way: “What our findings say to the country is (that) concerns about Medicaid expansion being financially unsustainable into the future are unfounded.”

Because California is an affluent state, they don’t get as much in federal matching funds for Medicaid. But this is referring to the traditional Medicaid program, which is funded jointly by the states and the federal government. For the ACA expansion population, the federal government will always pay the lion’s share of the tab — 90% as of 2020 and beyond — and there’s no difference from one state to another.

California and the federal government split traditional Medi-Cal costs roughly equally, with the federal government paying about one dollar for every dollar the state spends. In poorer states, the federal government matches at a rate of double or even triple that amount.

To make funds permanently available for the state’s portion of Medi-Cal costs (via a hospital fee that had already been implemented temporarily), Proposition 52 was on the November 2016 ballot in the state, and passed with 70% of the vote. Another ballot measure, Proposition 56, which passed with 64% of the vote, raises the tax on cigarettes, with a portion of the revenue being directed to various aspects of Medi-Cal.

California Medicaid History

Medi-Cal was established in 1966, and is now the nation’s largest Medicaid program in terms of enrollment. California Medicaid enrollment expanded significantly during the first three years of Medicaid expansion through the ACA, growing by more than four million people from 2013 to 2018.

Medi-Cal has expanded coverage and implemented new policies over the years, including introducing Medicaid managed care plans in 1973, implementing selective contracting strategies with hospitals in 1982, expanding access to family planning services in 1997, extending coverage to families at 100% of FPL in 2000, and expanding coverage to uninsured adults in 2010.

As of 2019, about 10.8 million Medi-Cal enrollees (out of about 13 million total enrollees) were covered under Medicaid managed care plans.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Apply for Medicaid in California

Online on the Covered California website. Fill out an application and mail it to P.O. Box 989725 West Sacramento, CA 95798-9725. Apply in person at a county social service office.

Eligibility: Children from birth through age 18 with family income levels up to 266% of FPL; pregnant women with incomes up to 213% of FPL; and nonelderly adults — with or without dependent children — with incomes up to 138% of FPL. Pregnant women with incomes up to 322% of FPL are eligible for MCAP.

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