Health Reform Facts: California

DEMOGRAPHY
The Patient Protection and
Affordable Care Act (ACA) was Percent of Population in California per Race / Ethnic Group2
enacted on March 23, 2010.
Successful implementation requires
cooperation between key
stakeholders, federal and state
agencies, and reform advocacy 14.1
organizations. Because the fifty White (Non-Hispanic)
states vary greatly, each state’s Black
42.3
implementationprocess will be
Hispanic
unique.
38.6 Other*

California has the largest

population in the United States,
6.7
estimated to be 36,961,664 in
2009.1 The health care needs of
California’s diverse population pose
challenges to those implementing *Others include American Indian, Alaska Native, Asian, Native Hawaiian and other
health reform in the state. Pacific Islanders.

CALIFORNIA AND THE UNINSURED: HOW WILL THE AFFORDABLE CARE ACT HELP?

While 81% of all Californians have health insurance, over 6.5 million individuals remain uninsured,3
including about 11% of California’s children4 and almost a quarter of the state’s working population.5

ACA is designed to address these concerns by providing affordable access to health insurance coverage
to those individuals who would otherwise be unable to obtain coverage, and to extend current benefits
and services provided by Medi-Cal (California’s Medicaid program, which is a federal and state funded
public insurance program that provides health insurance coverage for low-income and disabled
individuals and families).
NEW BENEFITS UNDER ACA: THE EFFECTS IN CALIFORNIA

ACA establishes new requirements for private health insurers in order to make health
Insurance care plans more accessible to the public. These requirements include the following:
Coverage  Effective Immediately: Plans must cover certain preventive health services, such as
vaccines and screenings, without a co-pay.

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National Coalition on Health Care June 2010
  Effective September 2010:
 Insurers will not be allowed to drop any insured person because he/she gets
sick or develops a chronic health condition. In addition, ACA allows individuals
to renew health insurance coverage regardless of their health status.
 Individuals up to the age of 26 can choose to be covered under their parents’
insurance plan.
 Effective January 2014:
 Under the “guaranteed issue” provision, an insurer must accept every
employer and individual in the state that applies for coverage.
 Insurers cannot exclude people from coverage if they have a pre-existing
condition (e.g., asthma, diabetes, or any other long-term condition) or past
illness.
 All insurers will be required to offer a coverage package that offers essential
benefits.
Effective Immediately: ACA makes tax credits available to qualifying small businesses to
Small
help them afford coverage for their employees. These tax credits could total up to 50% of
Business
a business’ health insurance premiums. In 2008, California had over 583,444 small
Assistance
businesses,6 which represented over 77% of the state’s employers.7
Effective January 2014: ACA requires that states create an insurance market “exchange” –
Health
a marketplace where people will be able to compare and shop for health insurance. This
Insurance
will make access to health plans easier and more efficient. U.S. citizens, legal immigrants,
Exchanges
and small businesses will be able to purchase insurance through these exchanges.
Effective January 2014: ACA provides a tax credit to qualified individuals so they may
Tax Credits purchase health insurance through the exchanges. Qualification for the tax credit will be
for based on the individual’s household income and his/her number of dependents. A
Individuals person who earns between 133% and 400% of the federal poverty level8 may be eligible
for individual tax credits.
Effective July 2010: High-risk pools are designed to provide health insurance coverage to
High-Risk
people who were previously uninsurable due to a pre-existing condition. It is estimated
Insurance
that this program may provide services to 30,000 Californians per year when fully
Pools
implemented. 9
Effective January 2014: ACA contains provisions which would create new eligibility
Expansion requirements for Medi-Cal (California’s Medicaid program). For example, adults under
of the age of 65 earning less than 133% of the federal poverty level, may be eligible to apply
Medi-Cal regardless of whether they have children. The Legislative Analyst’s Office in California
(Medicaid) estimates that approximately 2 million additional Californians may now be eligible for
Medi-Cal.10
IMPLEMENTATION CHALLENGES IN CALIFORNIA

Successful implementation of ACA will require a joint effort among local, state, and federal agencies, as
well as many non-governmental organizations. The State of California will face several challenges:

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National Coalition on Health Care June 2010
  Budget –In the proposed budget for California’s Fiscal Year 2010-2011, Governor Schwarzenegger
proposed several changes to the Medi-Cal program including new co-payments for services, limiting
the number of physician visits, and freezing hospital rates.11 The limited budget in California will be
a challenge for implementation, specifically when expansion of services is expected.
 Health Care Workforce– With the potential increase of California’s insured population, it is
important that primary care physicians and other necessary health care professionals are engaged
in health care reform. ACA provides grants and loan forgiveness to health care professionals; this
will help California ensure that it has an appropriate supply of doctors, nurses, social workers, and
other professionals to cover the increased demand.
 Insurance Oversight – California’s government will need to work alongside the Department of
Health and Human Services (HHS) and other federal agencies to establish procedures and reporting
requirements to oversee insurance companies’ compliance with ACA regulations. This has the
potential to increase the burden on California’s insurance commission, because it will be expected
to take on greater responsibility due to the proposed regulatory changes.12
 Diverse Population – California’s diverse population presents a special challenge to those
implementing ACA in the state. A key concern for California residents regarding their current health
care system is access to care. Providers must be sensitive to the state’s language, economic, and
cultural diversity. This means that access to care and the ability to understand one’s treatment
should not be threatened by one’s ethnicity, language, culture, or economic status.

1
U.S. CENSUS BUREAU. STATE AND COUNTY QUICKFACTS (2010), available at http://quickfacts.census.gov/qfd/states/06000.html (last accessed
June 2010). These figures are from 2009.
2
Ibid. These figures are from 2008.
3
THE KAISER FAMILY FOUNDATION, statehealthfacts.org. Data Source: Urban Institute and Kaiser Commission on Medicaid and the Uninsured
estimates based on the Census Bureau's March 2008 and 2009 Current Population Survey (CPS: Annual Social and Economic
Supplements), available at http://www.statehealthfacts.org:/comparetable.jsp?ind=125&cat=3 (last accessed June 2010).
4
THE KAISER FAMILY FOUNDATION, statehealthfacts.org. Data Source: Urban Institute and Kaiser Commission on Medicaid and the Uninsured
estimates based on the Census Bureau's March 2008 and 2009 Current Population Survey (CPS: Annual Social and Economic
Supplements), available at http://www.statehealthfacts.org:/comparetable.jsp?ind=127&cat=3 (last accessed June 2010).
5
COVER THE UNINSURED, ROBERT WOOD JOHNSON FOUNDATION, U.S. UNINSURED WORKERS, available at
http://covertheuninsured.org/uninsured_workers#map (last accessed June 2010). These figures are from 2006-2007.
6
Small businesses include employers with fewer than 50 employees.
7
U.S. DEP’T OF HEALTH & HUMAN SVCS. MEDICAL EXPENDITURE PANEL SURVEY (2008), available at
http://www.meps.ahrq.gov/mepsweb/data_stats/summ_tables/insr/state/series_2/2008/tiia1.pdf. These figures are from 2008.
8
The federal poverty level for the 48 contiguous states is $10,830 for a single individual. ASSISTANT SEC'Y FOR PLANNING AND EVALUATION, U.S.
DEP’T OF HEALTH & HUMAN SVCS. THE 2009 HHS POVERTY GUIDELINES (2010), available at http://aspe.hhs.gov/poverty/09poverty.shtml (last
accessed June 2010).
9
MAC TAYLOR, LEGISLATIVE ANALYST'S OFFICE, THE PATIENT PROTECTION AND AFFORDABLE CARE ACT: AN OVERVIEW OF ITS POTENTIAL IMPACT ON STATE HEALTH
PROGRAMS 12 (2010), available at http://www.lao.ca.gov/reports/2010/hlth/fed_healthcare/fed_healthcare_051310.pdf (last accessed
June 2010).
10
JOHN HOLAHAN & IRENE HEADEN, KAISER COMMISSION ON MEDICAID AND THE UNINSURED, MEDICAID COVERAGE AND SPENDING IN HEALTH REFORM: NATIONAL
AND STATE‐BY‐STATE RESULTS FOR ADULTS AT OR BELOW 133% FPL 41 (2010), available at http://www.kff.org/healthreform/upload/Medicaid-
Coverage-and-Spending-in-Health-Reform-National-and-State-By-State-Results-for-Adults-at-or-Below-133-FPL.pdf (last accessed June
2010).
11
MAC TAYLOR, LEGISLATIVE ANALYST'S OFFICE, THE 2010-11 BUDGET: OVERVIEW OF THE MAY REVISION 8 (2010), available at
http://www.lao.ca.gov/reports/2010/bud/may_revise/may_revision_051810.pdf (last accessed June 2010).
12
Marc Lifsher, Healthcare Reform Raises the Stake in California Insurance Commissioner Election, L.A. TIMES, May 26, 2010, available at
http://www.latimes.com/news/health/healthcare/la-fi-insurance-commissioner-20100526,0,2007534.story?page=1 (last accessed June
2010).

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National Coalition on Health Care June 2010