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