At the Clinica Sierra Vista offices in Fresno, the heart of California’s Central Valley, Melissa Reyna and her colleagues have spent the past several weeks prepping for open enrollment, the time of year when people who buy private insurance on the state’s health insurance marketplace can pick a plan for the following year’s coverage.
This year’s period, which kicked off Wednesday, comes after several tumultuous months for the Affordable Care Act that included multiple attempts by Congress to repeal and replace the law and numerous policy changes from the Trump administration, one of which left many states scrambling to determine insurance prices just days before the plans go on sale.
But the week before open enrollment began, Clinica Sierra Vista was calm. “It’s business as usual,” said Reyna, who is in charge of the clinic’s program to help people sign up for coverage.
As insurers, state governments and the more than 20 million people across the country who buy private insurance prepare for Obamacare’s fifth open enrollment period, the nation’s largest state has managed to shield its residents from the full impact of a very chaotic year in health policy. Unlike some other states, where insurers are fleeing and rates are jumping, California is doing pretty well by most metrics.
Although news coverage has focused on states where the marketplaces have been upended, California offers a different view into the soul of the Affordable Care Act: What does the law look like in a state that wants to make it work? California has wholeheartedly embraced the law, using it to get insurance to millions of people. It has also successfully deflected changes by the Trump administration that have caused insurance prices to go up in other states. And yet, despite its best efforts, several million people are still uninsured.
When it comes to the marketplaces themselves, California has been particularly successful at getting insurers to participate and maintaining relatively stable prices. Although about half the counties in the U.S. have just one insurer willing to sell coverage on the ACA marketplaces, all but five of California’s 58 counties have at least two.1 Eighty-two percent of Californians who used the marketplace to obtain coverage for 2017 will have at least three plans to choose from for next year, according to Covered California, the state’s insurance marketplace. Taking into account the kinds of plans people have purchased historically, the average price increase for 2018 is just 12.5 percent.2 The state is expecting nearly as many people to sign up this year as they have in previous years, even as enrollment is likely to decline nationally.
And California hasn’t just been content with making the law work within its borders — it also has its eyes set on keeping it going nationally. After the Trump administration announced that it would be cutting advertising for open enrollment, money that’s mostly spent on the 39 state marketplaces run by the federal government, the executive director of Covered California held a press briefing in Washington, D.C., to explain that if the federal government spent comparatively as much as California does, an additional 2.1 million people would be insured at the end of three years.3 California later joined a court case with 17 other states asking a judge to force the Trump administration to keep reimbursing insurers for discounts they provide to the poorest enrollees, even though it had mostly found a workaround for its own residents.
But California is also confronting challenges keeping insurance affordable and accessible for everyone, concerns that are national and difficult to fix: Health care is really expensive in the U.S., which means so is health insurance. And even though the Affordable Care Act provides subsidies for people making up to 400 percent of the federal poverty line, people who earn more than that are finding it tough to pay the full price for coverage. Others fall through gaps in the law that disqualify them for subsidies, despite being in families with low incomes. Those problems — combined with the ongoing difficulty of insuring immigrants, both documented and undocumented — have left about 3 million people in California uninsured.
In 2013, before the ACA’s biggest provisions kicked in, California had one of the highest uninsured rates, between 15 percent and 20 percent among non-elderly people,4 which was surprising in some ways. Unlike states with large rural populations, which have long struggled to recruit insurers and provide care to rural residents at reasonable costs, the bulk of California’s population lives in urban areas. The state’s gross domestic product is about the size of France’s, and it has long had pretty liberal policies for welfare and entitlement programs.
But even though it’s a wealthy state, many of its residents are very poor. It also has a lot of undocumented immigrants, who are barred from being covered with federal dollars. And it’s economy fluctuates, regularly swapping deficits with a balanced budget. In the pre-ACA era, that made it difficult to find a consistent funding stream to pay for coverage, said Richard Figueroa, who is a director with the California Endowment, one of the state’s largest health-focused philanthropies, and who previously worked on health policy under both Democratic and Republican state administrations.
“The sheer volume of uninsured, the millions of people, it just costs a lot of money,” Figueroa said. “And without some ability to leverage federal dollars, it was just a really tough nut to crack.”
California had tried in the past to overhaul its insurance system so that it would cover more people. It had established a high-risk pool for those with pre-existing conditions. It had expanded Medi-Cal — the state’s Medicaid program — to higher-income groups, and it ran county programs that provided limited care to the state’s poorest residents. Still, when the ACA passed, about 7 million people didn’t have insurance. Today, it’s fewer than one in 10, and of those remaining uninsured, half are undocumented immigrants. If you exclude that group, fewer than 5 percent of Californians are uninsured, according to Covered California.
That dramatic drop is the result of the state going all in when the ACA became law. With the new stream of federal money to expand Medicaid to cover people earning up to 138 percent of the federal poverty line and to help subsidize private insurance premiums, California began providing coverage for undocumented children using state dollars.
It also adopted the ideas behind the ACA with vigor. Many of the former private insurance plans that weren’t compliant with strict Obamacare rules on services that must be covered were ended,5 which ultimately made the marketplace plans cheaper. (That’s because people who already had coverage, and were therefore more likely to be healthy, then became part of the same risk pool as people who were previously uninsured and more likely to have health problems.6) And to encourage people to sign up, its open enrollment period still runs from Nov. 1 through Jan. 31, twice as long as that of the federally run marketplaces.
As a result, California has gone back and forth with Colorado for the highest ratio of healthy to sick enrollees of any state. And with that healthy balance have come relatively stable insurance marketplaces that haven’t seen the kind of dramatic price increases that have plagued other states.
And it has also been fending off what the Trump administration has been throwing its way. Take the recent decision by Trump to stop reimbursing insurers for a discount they give to the lowest-income enrollees, which rocked some states’ health insurance markets just days before open enrollment was set to begin. Anticipating the move, California figured out how to add the cost to plans in a way that kept buyers from seeing much of an increase in the price they pay.
Once again, California held a news conference to explain how the complicated actuarial maneuver would work — weeks before Trump had officially announced the payments would end. The state was so successful at staving off the price increases on consumers that a judge cited it as among the reasons he denied the 18-state requested injunction to keep the payments going, saying that it wasn’t clear who would be harmed by their termination.
Even though the private marketplaces are the part of the Affordable Care Act that gets the lion’s share of attention, the law’s expansion of Medicaid has in some ways affected the largest number of people nationwide. Perhaps nowhere is the impact of that change more clear than in California, where nearly 3.7 million people who had little hope of affording full-price insurance — mostly people of color — gained Medicaid coverage.
|RACE/ETHNICITY||2013||2016||CHANGE IN NUMBER OF INSURED, IN THOUSANDS|
|African American (non-Latino)||13.8||5.8||148||
But the state didn’t just sign up millions of previously ineligible people for Medicaid coverage. It also increased the services available to Medicaid recipients by using money made available through the ACA to expand community health centers. As a result, Californians think Medi-Cal is more important than ever. “It’s pretty incredible to increase your Medicaid program as dramatically as we did and not have glitches,” Figueroa said.
That doesn’t mean California has been without Affordable Care Act woes. The nation’s second-largest insurer, Anthem, which has about 19 percent of the Covered California market this year, decided to stop selling individual plans in half the state’s counties for 2018. That highlights one of the central challenges of the Affordable Care Act: The marketplaces rely on participation from insurers to work. And it’s the insurers that have the ultimate say as to whether the profits and incentives are sufficient.
But California — just like other states — has an even bigger hurdle: Health care is expensive.
Bill Carmany and his wife live in Los Angeles, where they own a small business that provides legal services to immigrants. Although they qualified for a subsidy to buy insurance on the ACA marketplace last year, their income this year is a little too high, and they will have to pay full price for 2018.
Before the ACA, Carmany had been denied coverage because of a pre-existing condition. He and his wife managed to get insurance through their business but were suddenly dropped by the plan. They then turned to Covered California but weren’t happy with their first plan (it left his wife driving long distances to get to a doctor in that network). After switching again last year, they have an insurer they are really happy with. Even though Covered California has made a point of advertising that those who shop around may find even cheaper plans for 2018, Carmany and his wife are loath to have to switch doctors again.
“Just because our income is going up doesn’t mean we feel it,” Carmany said. “Our other costs have also gone up, so it doesn’t feel like we’re doing better.”
The high cost of care is a problem across the country, and no matter how involved the state is, premiums will remain high. One short-term solution that California’s legislators have advocated for is raising the income limit to allow more people to qualify for subsidies. But that’s a political non-starter in Washington right now, and without federal funding, it’s unlikely to happen.
And just as California is pushing to make the ACA work, it’s also looking at a future without it.
The state’s elected officials have spent considerable time this year pushing back on Republican efforts to repeal and replace parts of the ACA, but they have also been pushing forward on a bold proposal to create a single-payer system. The hope is that it would cover the people who are still uninsured — a group that includes, among others, people who don’t qualify for subsidies but are by no means wealthy in a state with an extraordinarily high cost of living, as well as undocumented immigrants who currently can’t access any public assistance.
In many ways, this conversation about a single-payer system is happening precisely because Obamacare has worked so well in California — at its best, the ACA can push the insured rate to 90 percent of the population and keep prices stable. But that can still leave millions uninsured, and stable prices don’t necessarily mean low prices. Health care is expensive. If universal coverage is the goal, as is often declared in the Golden State, it’s unlikely to happen through the Affordable Care Act. But it also can’t happen without federal dollars, as made clear by attempts in Vermont, Colorado … and California to establish a single-payer system. At the very least, that means California wants to save the ACA to keep the federal funds flowing for now — so it can rely on that money for whatever comes next.
But for now, the state has the Affordable Care Act. And California wants the country to know that despite what President Trump has said, the law is far from dead.