Continuing the Path Toward Universal Health Coverage in California

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.

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:

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.