Despite recent strides in increasing CalWORKs grants, persistent challenges remain in addressing deep poverty for California families. By advancing reforms, state leaders can lift families out of poverty and ensure economic security for Californians.
The California Work Opportunity and Responsibility to Kids (CalWORKs) program plays a crucial role in supporting children and families with low incomes. CalWORKs not only aids families financially, by providing modest monthly cash grants to over 650,000 children across the state, but also assists parents in overcoming employment barriers.1Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data. Although recent increases in CalWORKs grants have helped prevent deep poverty for many families, there is still work to do to ensure the prosperity of all CalWORKs families.
The Impact of Deep Poverty on California’s Children
Deep poverty — which occurs when a family’s income falls below half the official federal poverty line (FPL) — takes a toll on both children and the state. This hinders the development of a healthy society and economy. In 2022, approximately 6.6% of children in California were living in deep poverty.2Based on Budget Center analysis of US Census Bureau, American Community Survey data for 2022. Children experiencing poverty are more likely to face poverty in adulthood, impacting their overall well-being. When family incomes fall short of meeting basic needs, children may struggle to concentrate in school, face increased health risks in crowded living conditions, and endure heightened stress levels, negatively affecting their immune system and neurological development.3Mercedes Ekono, Yang Jiang, Sheila Smith, Young Children in Deep Poverty (National Center for Children in Poverty, January 2016). Allowing poverty to persist jeopardizes the prosperity of the entire state.
CalWORKs Advances: A Closer Look at Recent Progress
Despite facing cuts during and after the Great Recession, such as reduced grant levels and the elimination of the annual state cost-of-living adjustment (COLA), CalWORKs has seen positive developments in recent years. The 2022-2023 state budget marked a significant milestone with an effective 21% increase in CalWORKs grants — the largest since the program began in 1998. The 2023-2024 budget continued this trend with a 3.6% increase. For CalWORKs families, these advancements represent crucial steps toward eliminating deep poverty.
However, some CalWORKs families still receive grants below the deep poverty line. CalWORKs grants are adjusted according to the number of people in the household who are eligible for cash assistance. However, family members may be excluded from grant calculations if they:
have exceeded the time limit for assistance
are sanctioned for not meeting work requirements
are ineligible due to their immigration status
About 37% of CalWORKs families only receive aid for the children in the household, excluding the parents.4Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data. This amounts to 240,000 children in households that are not guaranteed a grant above the deep poverty threshold. This is only a baseline scenario, as some families may have one excluded parent while the other receives aid. Families of three with one excluded family member receive a maximum monthly grant that is as low as 42.5% of the FPL. This leaves them without sufficient assistance for basic needs.
Enhancing CalWORKs to Lift Families Out of Poverty
State leaders can help California families avoid deep poverty by increasing CalWORKS grants for families with excluded family members, similar to those not facing such exclusions. Simultaneously, leaders can strive to reduce the number of families that face exclusions by reforming CalWORKs sanctions. State leaders can ensure that no family in the CalWORKs program lives in deep poverty by:
Eliminating non-federally required sanctions.
Reducing the length of time parents are excluded from aid.
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key takeaway
Federal government shutdowns can significantly disrupt California’s essential safety net programs, potentially affecting millions of residents and underscoring the importance of ongoing support for these vital services.
Access to health care, affordable food, safe housing, and a safety net to turn to during unexpected challenges is essential for everyone. Safety net programs provide critical support to more than 1 in 3 Californians every year. Without these important public supports, California’s poverty rate would be much higher.
During a federal government shutdown, safety net programs that receive federal funding can be affected, potentially causing disruptions to the lives of millions of Californians. This Q&A provides an overview of California’s safety net programs and how they can be impacted during a federal government shutdown.
What Are Safety Net Programs and How Many Californians Do They Support?
Safety net programs provide financial assistance, health care, and other essential services to millions of Californians. These programs help people with low-incomes or people experiencing unexpected challenges — such as losing a job — receive the care and support they need to get by. California safety net programs are supported by state and federal funding.
Why Does a Federal Government Shutdown Happen?
A federal government shutdown occurs when the United States Congress fails to pass annual or temporary spending bills before the start of the new federal fiscal year, which begins on October 1st. Federal policymakers can enact temporary spending bills, or continuing resolutions, that allow the government to continue operating while policymakers reach an agreement on the federal budget. Shutdowns typically happen due to political disputes, disagreements over spending priorities, and legislative gridlock.
How Can a Federal Government Shutdown Impact Safety Net Programs?
The duration of a federal government shutdown would determine the impact on safety net programs. Prolonged shutdowns can have devastating consequences for Californians who receive health, food, and housing assistance. If a shutdown persists, California policymakers should allocate additional state funds to sustain critical programs and services.
In contrast, shorter federal government shutdowns, lasting only a few days, generally cause less disruptions. Californians can still access various health and safety net supports during these brief closures. For instance, Californians who rely on Medi-Cal can maintain access to health care services, as Medi-Cal providers could continue to receive reimbursement in the short term. This is partly due to advance funding provisions within the Medicaid program, which can be secured in prior federal budgets.
What Are the Potential Impacts of a Brief Government Shutdown?
Community health centers, including Federally Qualified Health Centers, are more susceptible to adverse impacts. Even a brief shutdown would affect community health centers’ ability to provide services and meet operating expenses because they rely on funding from federal grants.
Short shutdowns can also have repercussions for other safety net programs. Some government employees would be furloughed during shutdowns, which means programs could experience staffing shortages. Staffing shortages could negatively impact Californians. For example, even though Californians could continue to receive rental assistance through HUD (Housing and Urban Development), nearly all of HUD’s fair housing activities would cease due to a reduced staffing.
What’s At Stake?
A prolonged federal shutdown could have disastrous effects on our state and disrupt the lives of millions of Californians, especially communities of color. Past and current racist wage and employment policies concentrate people of color into under-valued occupations with lower wages and minimal benefits. As a result, Black, Latinx, and other Californians of color are more likely to have trouble affording basic needs — like housing, groceries, and diapers — and are also more likely to qualify for safety net programs. If a prolonged shutdown leads to a suspension or reduction of critical programs and services, it would disrupt the lives of millions of Californians and exacerbate economic inequality. This underscores the need to ensure that every Californian, regardless of their race, age, zip code, or gender, can thrive and share in the state's prosperity.
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key takeaway
California’s uninsured rate reached an all-time low in 2022, but the state must now work to maintain this progress. State leaders must ensure equitable access to health coverage as they process Medi-Cal renewals, which were temporarily suspended during the COVID-19 pandemic.
Consistent access to health care is necessary for everyone to be healthy and thrive. During the pandemic, millions of Californians with low incomes were able to stay continuously enrolled in Medi-Cal (California’s state Medicaid program) due to a federal pandemic-era policy.1A provision in the federal Families First Coronavirus Response Act passed in March 2020 required states to provide continuous coverage for Medicaid beneficiaries in exchange for enhanced federal funding during the federally declared Public Health Emergency (PHE). The Consolidated Appropriations Act of 2023, which federal policymakers passed in December 2022, delinked the continuous coverage provision from the PHE, thereby ending this provision on March 31, 2023. Partly as a result of this federal policy, Medi-Cal enrollment in California reached an all-time high — with over 15 million people enrolled — while the uninsured rate dropped to a historic low (6.5%).
Earlier this year, California began processing Medi-Cal renewals for the first time since the start of the pandemic. Recent data reveal an alarming trend: More than 500,000 Californians have lost Medi-Cal coverage during recent months. Although not everyone who loses Medi-Cal coverage becomes uninsured, the majority of people who lost coverage did so because of paperwork challenges. Certain groups, including immigrants, older adults, and people with disabilities, are at greater risk of losing Medi-Cal coverage during this continuous coverage “unwinding” period.
State leaders have implemented measures to reduce barriers to accessing and maintaining Medi-Cal coverage. Still, policymakers can take additional steps to prevent Californians who remain eligible for Medi-Cal from losing coverage. This includes pausing procedural terminations and investing in health navigators. By taking additional action, state leaders can strive to ensure that all Californians, regardless of race, age, disability, or immigration status, can access and maintain the critical health coverage they need to be healthy and thrive.
What is health equity?
When everyone has the opportunity to be as healthy as possible and no one is disadvantaged from achieving this because of their race, gender identity, sexual orientation, the neighborhood they live in, or any other socially defined circumstance.
California’s Health Coverage Landscape: Progress, Disparities, and the Path to Equitable Coverage
California has made significant strides in expanding access to health coverage. This progress is primarily due to the federal Affordable Care Act (ACA) and, more recently, the state’s efforts to expand comprehensive Medi-Cal coverage to income-eligible undocumented Californians. The percentage of Californians without health coverage decreased to 6.5% in 2022, down from the previous record low of 7% in 2021. These recent improvements in health coverage highlight the significant progress that California has made over the last decade when the uninsured rate was over 17%.
While access to health coverage has improved for all racial/ethnic groups in California over the last decade, racial disparities in coverage persist. Notably, gains in health coverage were significantly lower for Californians who identified as American Indian or Alaska Native (AI/AN), who had the highest uninsured rate. The uninsured rate of AI/AN Californians was nearly double that of the overall Californian population. Racial disparities were also evident for Latinx Californians, who had the second-highest uninsured rate. This is particularly concerning given that people identifying as Latinx account for over 40% of the state’s population.
The racial disparities in health coverage highlight the profound and enduring impact of racism, which blocks Californians of color from equal access to health care. For example, some people of color may hesitate to seek coverage because they distrust the government and health care systems that are responsible for past and ongoing mistreatment against them, their families, and their communities. Another instance of a racist policy is the exclusion of undocumented immigrants, driven by racial and xenophobic biases, from enrolling in federally funded Medicaid coverage or purchasing coverage through the ACA marketplaces.2Undocumented immigrants are not eligible to enroll in federally funded Medicaid coverage or purchase coverage through the ACA Marketplaces. In recent years, California has allocated state funding to expand eligibility for full-scope Medi-Cal to undocumented immigrants.
While California has made significant progress in increasing health coverage, there is much more work to be done to ensure equitable access to health coverage for all Californians. Addressing the racial disparities in health coverage requires targeted outreach and education efforts along with other antiracist policy actions to improve health and well-being for Californians of color.
Many Californians Are Losing Medi-Cal Coverage Due to Paperwork Challenges
On April 1, 2023, California began the process of redetermining eligibility for Medi-Cal enrollees for the first time since the onset of the COVID-19 pandemic. The California Department of Health Care Services (DHCS) publishes data showing the number of Californians who become disenrolled as a result of the redetermination process (i.e., undergo a procedural termination).3The California Department of Health Care Services (DHCS) publishes interactive Medi-Cal dashboards detailing statewide and county-level demographic data on Medi-Cal application processing, enrollments, redeterminations, and renewal outcomes. DHCS also provides valuable insight into the circumstances leading to the disenrollment of Medi-Cal beneficiaries, which are categorized as follows:
Procedural: an individual loses coverage due to issues with their renewal paperwork.4In this issue brief, the term "paperwork" is used in place of the term "procedural." This may be a result of a Medi-Cal enrollee not receiving or returning requested forms on time, or other issues with the application system.
Over Income: an individual's income exceeds the Medi-Cal eligibility threshold, potentially making them eligible for coverage through Covered California — the state’s health insurance marketplace.
Other Reasons: an individual moves out of the state, voluntarily disenrolls, or passes away.
Nearly 9 in 10 Californians (89.2%) who lost Medi-Cal coverage in August 2023 did so because they did not complete the renewal paperwork or had incorrect or missing information in their forms. Although not everyone who loses Medi-Cal coverage becomes uninsured, the data reveal a troubling trend.5Medi-Cal members have 90 days after their disenrollment to provide the necessary outstanding information to their local Medi-Cal office to restore their coverage. After the 90 days, people can submit a new application. Historically, California has seen a reinstatement rate of about 4% over the 90-day period.
Completing the renewal process often involves complex paperwork and documentation requirements, which can be difficult to navigate. Additionally, some Californians have experienced extended call wait times when attempting to contact county Medi-Cal workers regarding their application.
Certain groups, including older adults and people with disabilities, are at greater risk of losing Medi-Cal coverage during the unwinding period.6Jennifer Tolbert and Meghana Ammula, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision (Kaiser Family Foundation, June 2023). Immigrants and their family members face unique obstacles to remaining covered, such as language barriers, privacy concerns, and fear of immigration consequences. As such, many Californians who are losing Medi-Cal coverage due to paperwork challenges may still meet the eligibility criteria.7Of the redeterminations that were received and processed in August 2023, about 20% were ineligible. See California Department of Health Care Services, Medi-Cal Continuous Coverage Unwinding Dashboard (August 2023), 14.
The high disenrollment rate due to paperwork challenges underscores the need to further streamline the renewal process and alleviate the paperwork burden on beneficiaries during the unwinding period and beyond. Addressing these challenges is essential to ensure that those who are eligible for Medi-Cal continue to receive vital health coverage.
Policy Recommendations to Support Equitable Access to Health Coverage Amidst the Unwinding Period
State leaders have taken steps to mitigate the impact of the continuous coverage unwinding period and better support access to health coverage. Earlier this year, the California Department of Health Care Services (DHCS) set forth a detailed plan with a guiding principle to maximize the continuity of coverage for Medi-Cal beneficiaries. These actions include:
Providing one-time funding support to local county offices, which are responsible for determining the initial and continuing Medi-Cal eligibility for an individual or a family.
Authorizing Covered California to enroll individuals in a qualified health plan when they lose Medi-Cal coverage.
Engaging community partners to serve as “Coverage Ambassadors” to share information with Medi-Cal beneficiaries about how to maintain Medi-Cal coverage.
State leaders can build on previous policy changes by taking action on the following recommendations:
Encouraging DHCS to suspend procedural Medi-Cal terminations given the high rate of such termination
This could help toprevent undue disruptions in health coverage. Additionally, the state can identify the reasons why these disenrollments are occurring and develop strategies to remedy this.
Recommending DHCS to increase the rate of ex parte renewals
Expanding investments in health navigators to ensure that Californians who are eligible for Medi-Cal do not lose coverage
Health navigators are trusted members of a community who play an important role in making sure that people who are eligible for Medi-Cal can access coverage. They help to inform community members about health coverage programs and services in a way that is linguistically and culturally responsive to the communities they serve.
Accelerating the implementation of continuous Medi-Cal coverage for children from birth to age 5
In 2022, policymakers passed legislation that would allow children enrolled in Medi-Cal to remain enrolled without administrative renewals. However, this policy is not slated to begin until January 2025.
Submitting a waiver to provide adults 12 months of continuous coverage
Several other states have done so. Extending continuous coverage for adults would promote consistent health care access, reduce administrative burdens, and increase economic stability for Californians.
By taking these steps, state leaders can work towards ensuring that all eligible individuals, regardless of age, disability, or immigration status, can access and maintain the critical health coverage they need in order to be healthy and thrive.
A provision in the federal Families First Coronavirus Response Act passed in March 2020 required states to provide continuous coverage for Medicaid beneficiaries in exchange for enhanced federal funding during the federally declared Public Health Emergency (PHE). The Consolidated Appropriations Act of 2023, which federal policymakers passed in December 2022, delinked the continuous coverage provision from the PHE, thereby ending this provision on March 31, 2023.
The California Department of Health Care Services (DHCS) publishes interactive Medi-Cal dashboards detailing statewide and county-level demographic data on Medi-Cal application processing, enrollments, redeterminations, and renewal outcomes.
4
In this issue brief, the term "paperwork" is used in place of the term "procedural."
5
Medi-Cal members have 90 days after their disenrollment to provide the necessary outstanding information to their local Medi-Cal office to restore their coverage. After the 90 days, people can submit a new application. Historically, California has seen a reinstatement rate of about 4% over the 90-day period.
Of the redeterminations that were received and processed in August 2023, about 20% were ineligible. See California Department of Health Care Services, Medi-Cal Continuous Coverage Unwinding Dashboard (August 2023), 14.
You may also be interested in the following resources:
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About this event
Making sure every Californian has access to quality health care should be a top priority for policymakers. Despite significant progress toward universal coverage over the last decade, we know that racial disparities in coverage persist. In addition, many Californians are losing access to health care, including our state’s Medi-Cal system.
We’ll explore the recent downward trend in Medi-Cal coverage and learn what state leaders can do to ensure that all Californians can access and maintain the health coverage they need in order to be healthy and thrive.
You’ll hear from a panel featuring a researcher, an advocate, a community health worker, and a state official, each offering their unique perspective on efforts to expand health care coverage and build a robust health workforce that reflects communities throughout California.
Maria Lemus, Executive Director, Vision y Compromiso
Celia Valdez, Director of Health Coverage, Maternal and Child Health Access
Elizabeth Landsberg, Director, California Department of Healthcare Access and Information
Thank you to our event sponsors
Blue Shield of California Foundation, Heising Simons Foundation, James Irvine Foundation, Hilton Foundation
About the California Budget & Policy Center
The California Budget & Policy Center is a research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.
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