New Census Data Show That California’s Poverty Rate Remained High in 2012, Despite Economic Recovery

September 18, 2013

A new CBP report looks at the Census Bureau data released yesterday, which show that despite the state’s emerging economic recovery, California’s poverty rate was essentially unchanged in 2012 — at 15.9 percent — and remained about one-third higher than in 2006, the year before the recession began. The new Census data show that more than 6 million Californians had incomes below the federal poverty line and that 2.1 million of the state’s children — nearly one out of four — were living in poverty.

The new Census data also show that the state’s median household income in 2012 was $57,020, nearly 10 percent below what it was in 2006, after adjusting for inflation. One positive trend in the new Census data is in the area of health coverage, with a significant year-to-year drop in the share of Californians who are uninsured as well as longer-term gains in providing health coverage for children.

Like our recent report on employment and earnings in California, this new analysis underscores that many of the state’s residents continue to face severe economic challenges in the aftermath of the Great Recession. That’s why it’s critical that policymakers sustain a strong social safety net for individuals and families, while also making the necessary public investments in education, job-related services and supports, and other foundations of widely shared economic growth.

— Steven Bliss


Expanding Medi-Cal: We’re Not Starting From Scratch

December 21, 2012

California isn’t starting from square one as the state moves toward expanding Medi-Cal coverage to most low-income adults under age 65, pending approval in 2013 by state lawmakers and Governor Brown. Under a 2010 agreement with the federal government, California established a temporary, county-based Low Income Health Program (LIHP) that is building a bridge to an expanded Medi-Cal Program in 2014. LIHP provides health coverage to uninsured adults ages 19 to 64 who meet citizenship or immigration requirements and are excluded from Medi-Cal under current eligibility rules. The income of participating adults cannot exceed 200 percent of the federal poverty line (a limit equal to $22,340 for an individual in 2012), although counties generally may — and in many cases have — set lower eligibility thresholds. County participation in LIHP is voluntary; counties that opt into the program have half of their LIHP costs paid by the federal government. As of September 2012, more than 500,000 low-income Californians across 50 counties were enrolled in LIHP.

LIHP provides vital health care services to low-income adults who otherwise would be uninsured. It’s also bringing substantial federal dollars — projected to reach nearly $3 billion — into California’s health care sector and the broader state economy. But even more, LIHP is helping to prepare California for the expansion of Medi-Cal as envisioned in the federal health care reform law. This is because nearly all of the adults enrolled in LIHP — along with many other low-income Californians — would be newly eligible for Medi-Cal under the expansion. In fact, state officials are already planning for the transition of eligible LIHP enrollees to Medi-Cal effective January 1, 2014. At that point, the federal government will pay 100 percent of the cost of coverage for this new group of Medi-Cal beneficiaries through 2016, with the state picking up a small share of the cost in subsequent years. So, for anyone wondering when the Medi-Cal expansion will begin in California, LIHP provides an answer: It’s already under way. It’s now up to state policymakers to maintain the current momentum and propel the expansion — a key component of federal health care reform — across the finish line.

— Scott Graves


Expanding Medi-Cal: Small State Cost, Big Impacts

December 19, 2012

In January, the Legislature likely will begin considering how to implement a key component of the federal health care reform law in California: the expansion of Medicaid coverage to most people with incomes at or below 138 percent of the federal poverty line (an eligibility limit that currently is $15,415 per year for an individual). As we noted in a blog post last week, the vast majority of the cost of the expansion will be covered by the federal government, including 100 percent of the cost from 2014 to 2016. As a result, the expansion is likely to have a relatively minor impact on the state budget. This assessment is reinforced by a new report from the Kaiser Family Foundation. The report, authored by researchers from The Urban Institute, uses a rigorous study design to estimate the impact of boosting access to Medicaid — known as Medi-Cal in California — in all 50 states.

The cost to California of expanding Medi-Cal coverage is projected to account for less than 2 percent of total state Medi-Cal spending over the next 10 years. Specifically, the report projects that California is on track to spend about $375 billion on Medi-Cal between 2013 and 2022 — without taking the Medi-Cal expansion into account. Expanding Medi-Cal as envisioned in the federal Affordable Care Act would add only about $6 billion to the state’s costs over this 10-year period, equal to just 1.7 percent of total projected state Medi-Cal spending.

The study estimates that the state’s relatively modest $6 billion investment would allow an additional 1.9 million Californians to access affordable health care coverage through Medi-Cal in 2022 alone. In addition, the study projects that expanding Medi-Cal would bring nearly $69 billion in additional federal dollars — 11 times the state’s investment — into California’s health care sector and the broader state economy over the next decade. That’s quite a bang for the state’s health care buck.

— Scott Graves


Ensuring Affordable Access to Health Coverage

October 31, 2011

Today is the deadline to comment on a number of proposed rules implementing the Affordable Care Act. One that the CBP finds particularly noteworthy is a set of proposed regulations written by the Treasury Department that serve to determine whether job-based coverage is affordable.

How affordability is defined is crucial for determining whether families will have access to subsidized health coverage through state health insurance exchanges. As written, the Treasury Department’s proposed rule penalizes families who have access to job-based coverage through a working family member.

In an effort to preserve job-based health coverage, the ACA generally does not allow individuals to purchase coverage through state health insurance exchanges if they can get it through an employer. This applies whether an individual is the worker or a dependent of the worker. This means that workers and their dependents must accept job-based health coverage, even if that coverage is less comprehensive or more expensive than what is available through the exchange.

The ACA provides an exception if the job-based coverage is “unaffordable,” defined as costing 9.5 percent or more of household income. For a single employee, applying the rule is simple. The complication is for workers with dependents. Premium costs are higher for a family than for a single individual. Yet, the proposed rule assesses the affordability of the premium based on the cost for the worker, not the family. Therefore, if premium costs for a worker alone are less than 9.5 percent of income – even if the cost of family coverage is much higher – then the dependents of this worker would be barred from purchasing subsidized health coverage in the exchange because they would be considered to have access to affordable job-based coverage.

If the proposed rule is adopted as written, then millions of families would either have to pay large portions of their incomes toward premium costs for job-based coverage, or go without coverage altogether, contrary to the intent of the ACA. Treasury should modify the proposed rule to allow affordability of family coverage to take into account premium costs for a family – rather than a single individual. A number of organizations, including the Kaiser Family Foundation, have weighed in on the issue. Find the CBP’s comments on the issue here.

— Hanh Kim Quach


The Affordable Care Act in Action

October 4, 2011

Amid the sea of downward sloping graphs marking the Great Recession, a small green shoot has begun to emerge. Recently released Census data show that the share of uninsured young adults between ages 18 and 24 remained essentially flat from 2009 to 2010 in spite of this population’s high rate of joblessness during the recession. The emerging trend points to the early success of a year-old provision in the Affordable Care Act of 2010 (ACA) allowing young adults to remain on their parents’ health coverage up until age 26.

In California, 66.5 percent of young adults between age 18 and 24 had health coverage in 2009 compared to 66.4 percent in 2010 – a 0.1 percentage-point difference. In contrast, adults age 25 through 64 experienced a far larger decline in coverage. In 2009, 77.3 percent of this population had health coverage, compared with 76.3 percent in 2010, according to Census data. Other data have also begun to substantiate this trend. The Centers for Disease Control and Prevention (CDC) shows that the share of young adults between ages 19 and 25 with insurance increased by more than three percentage points in the first three months of 2011. A recent Gallup poll shows similar trends.

Young adults are of particular interest in the effort to broaden access to health coverage. In recent years, this population has represented the largest and fastest-growing segment of the US population without health coverage. Many factors influence the insurance rate of young adults as described in this report. At age 19, many lose coverage through Medicaid, other public programs, or their parents. In addition, young adults may be new employees in jobs where they are less likely to be eligible for, or offered, coverage. For much of the past decade, the CDC shows, the uninsurance rate among young adults has generally increased, peaking at 33.9 percent in 2010.

The ACA policy has been especially important in light of high unemployment among young adults during the Great Recession. More than one out of five Californians between 18 and 25 were unemployed in 2010 according to recent Census data, making it even less likely that they would have access to affordable health coverage. Allowing young adults to remain on their parents’ coverage as they venture into the world – and through tough economic times – will help to smooth a major transition in their lives.

–Hanh Kim Quach


The Affordable Care Act Turns Six Months

September 23, 2010

Last week’s release of Census data showing significant declines in health coverage ironically comes as the country recognizes the six-month anniversary of the Affordable Care Act. The rise in the number of uninsured highlights the importance of one of the law’s primary goals: to significantly expand health coverage to Americans. In California, nearly two-thirds of currently uninsured nonelderly individuals could gain coverage through the expansion of Medicaid – Medi-Cal in California – and through subsidies that make health coverage more affordable for low- to middle-income families.

While troubling, last week’s Census data on health coverage was not surprising. The data showed a significant decline in job-based coverage in 2009, likely due to high levels of unemployment. These data mirror more dramatic California-specific findings from the UCLA Center for Health Policy Research.

Beginning in 2014, the health law will extend eligibility for Medi-Cal to persons earning less than 133 percent of the federal poverty line (approximately $14,400 for an individual in 2010). While the health law may not help many Californians who lack coverage today, Medi-Cal is a critical backstop for families currently eligible for the program who lost coverage in the economic downturn. Medi-Cal enrollment has increased sharply during the recession.  From October 2005 through October 2007, Medi-Cal increased by 0.3 percent. In contrast, Medi-Cal increased by 9.2 percent from October 2007 through October 2009, the most recent data available.

The new federal health law may also have additional, modest impacts in the coming months. Beginning today, young adults, whose employment rates have dropped substantially in the recession, will be eligible to remain on their parents’ health coverage plans until age 26. Additionally, health plans will no longer be able to deny health coverage to children with pre-existing medical conditions.

The availability and accessibility of health coverage, whether public or private, gives at least a modest assurance of economic security for families weathering the recession. Last week’s Census data, while dismal, are a good reminder of why it’s important to put in place strong policies that will help Californians ride out future economic storms.

— Hanh Kim Quach

The Affordable Care Act Turns Six Months

Last week’s release of Census data showing significant declines in health coverage ironically comes as the country recognizes the six-month anniversary of the Affordable Care Act. The rise in the number of uninsured highlights the importance of one of the law’s primary goals: to significantly expand health coverage to Americans. In California, nearly two-thirds of currently uninsured nonelderly individuals could gain coverage through the expansion of Medicaid – Medi-Cal in California – and through subsidies that make health coverage more affordable for low- to middle-income families.

While troubling, last week’s Census data on health coverage was not surprising<LINK1>. The data showed a significant decline in job-based coverage in 2009<LINK2>, likely due to high levels of unemployment <LINK3>. These data mirror more dramatic California-specific findings from the UCLA Center for Health Policy Research.

Beginning in 2014, the health law will extend eligibility for Medi-Cal to persons earning less than 133 percent of the federal poverty line (approximately $14,400 for an individual in 2010). While the health law may not help many Californians who lack coverage today, Medi-Cal is a critical backstop for families currently eligible for the program who lost coverage in the economic downturn. Medi-Cal enrollment has increased sharply during the recession.  From October 2005 through October 2007, Medi-Cal increased by 0.3 percent. In contrast, Medi-Cal increased by 9.2 percent from October 2007 through October 2009, the most recent data available <LINK4>.

The new federal health law may also have additional, modest impacts in the coming months. Beginning today, young adults, whose employment rates have dropped substantially in the recession, will be eligible to remain on their parents’ health coverage plans until age 26. Additionally, health plans will no longer be able to deny health coverage to children with pre-existing medical conditions.

The availability and accessibility of health coverage, whether public or private, gives at least a modest assurance of economic security for families weathering the recession. Last week’s Census data, while dismal, are a good reminder of why it’s important to put in place strong policies that will help Californians ride out future economic storms.

— Hanh Kim Quach

Hyperlinks:

The Affordable Care Act Turns Six Months

Last week’s release of Census data showing significant declines in health coverage ironically comes as the country recognizes the six-month anniversary of the Affordable Care Act. The rise in the number of uninsured highlights the importance of one of the law’s primary goals: to significantly expand health coverage to Americans. In California, nearly two-thirds of currently uninsured nonelderly individuals could gain coverage through the expansion of Medicaid – Medi-Cal in California – and through subsidies that make health coverage more affordable for low- to middle-income families.

While troubling, last week’s Census data on health coverage was not surprising<LINK1>. The data showed a significant decline in job-based coverage in 2009<LINK2>, likely due to high levels of unemployment <LINK3>. These data mirror more dramatic California-specific findings from the UCLA Center for Health Policy Research.

Beginning in 2014, the health law will extend eligibility for Medi-Cal to persons earning less than 133 percent of the federal poverty line (approximately $14,400 for an individual in 2010). While the health law may not help many Californians who lack coverage today, Medi-Cal is a critical backstop for families currently eligible for the program who lost coverage in the economic downturn. Medi-Cal enrollment has increased sharply during the recession.  From October 2005 through October 2007, Medi-Cal increased by 0.3 percent. In contrast, Medi-Cal increased by 9.2 percent from October 2007 through October 2009, the most recent data available <LINK4>.

The new federal health law may also have additional, modest impacts in the coming months. Beginning today, young adults, whose employment rates have dropped substantially in the recession, will be eligible to remain on their parents’ health coverage plans until age 26. Additionally, health plans will no longer be able to deny health coverage to children with pre-existing medical conditions.

The availability and accessibility of health coverage, whether public or private, gives at least a modest assurance of economic security for families weathering the recession. Last week’s Census data, while dismal, are a good reminder of why it’s important to put in place strong policies that will help Californians ride out future economic storms.

— Hanh Kim Quach

Hyperlinks:

http://www.healthpolicy.ucla.edu/pubs/Publication.aspx?pubID=382

http://www.healthpolicy.ucla.edu/pubs/files/Uninsured_8-Million_PB_%200310.pdf

Graph links

Link 1) More Than One Out of Five Californians Under Age 65 Lack Health Coverage

Link 2) The Share of Californians Under Age 65 With Job-Based Health Coverage Has Declined Significantly Since 2006

Link 3) California’s Unemployment Rate was 12.4 Percent in August 2010

Link 4) Medi-Cal Enrollment Has Climbed Steadily During the Recession

http://www.healthpolicy.ucla.edu/pubs/Publication.aspx?pubID=382

http://www.healthpolicy.ucla.edu/pubs/files/Uninsured_8-Million_PB_%200310.pdf

Graph links

Link 1) More Than One Out of Five Californians Under Age 65 Lack Health Coverage

Link 2) The Share of Californians Under Age 65 With Job-Based Health Coverage Has Declined Significantly Since 2006

Link 3) California’s Unemployment Rate was 12.4 Percent in August 2010

Link 4) Medi-Cal Enrollment Has Climbed Steadily During the Recession


Healthy Children, Healthy State

February 3, 2010

For the second straight year, Governor Arnold Schwarzenegger has proposed scaling back or completely eliminating the state’s Healthy Families Program. Healthy Families provides health, vision, and dental benefits to children whose family incomes are too high for them to qualify for Medi-Cal. The Governor’s recent proposals would result in 203,300 children in families earning more than $36,620 — 200 percent of the poverty line — losing coverage. The remaining 680,000 would lose their vision benefits, meaning they would no longer be able to see an eye doctor or fill a prescription for eyeglasses. In the worst case, the Governor’s proposals would completely eliminate the program, leaving all 880,000 children currently enrolled without health coverage. Ironically, just a few short years ago, this Governor had proposed universal children’s coverage in his comprehensive health reform proposal.

There are quantifiable impacts to the Governor’s proposals, such as the fact that the state would lose nearly $826 million in federal matching dollars for the $222 million in state dollars saved by whittling down, and eventually eliminating Healthy Families. This means that the impact of the Governor’s proposed cut on the California economy would be more than triple the amount of the state savings.

Beyond the dollars, there are also the impacts that cannot be easily counted, such as the lost opportunities for children who, without eyeglasses, will not be able to see the chalkboard. Without proper treatment of health conditions, others may find it difficult to concentrate in class. The Managed Risk Medical Insurance Board, which administers the Healthy Families Program, has studied the impact of the Healthy Families Program. It found that after two years, newly enrolled children initially considered “at risk,” with the lowest parent-reported health status, saw improvements in their physical health. More dramatically, however, the study reported that these children showed sharp improvements in their ability to pay attention in class, as well as their ability to keep up with school activities.

Tightening the vice on the Healthy Families Program, and thereby limiting children’s ability to be healthy and productive, comes at a time when policymakers are discussing ways to improve academic performance for all children. As we begin our discussion of the state’s spending priorities, it will be important to consider not just the dollar savings of today, but the investment we could make in tomorrow.

— Hanh Kim Quach

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