University of California Los Angeles and University of California Berkeley: A Little Investment Goes A Long Way – Modest Cost to Expand Preventive and Routine Health Services to All Low-Income Californians

This analysis from the University of California Los Angeles Center for Health Policy Research and University of California Berkeley Labor Center estimates a relatively modest cost to the state of California to provide state-funded Medicaid (MediCal) to low-income California residents regardless of immigration status. Between 2.7 and 3.4 million Californians under age 65 are predicted to still remain uninsured by 2019, after the Patient Protection and Affordable Care Act is fully implemented. Of those predicted to remain uninsured, almost half ā€” between 1.4 and 1.5 million ā€” are ineligible for federal coverage options because of their immigration status.

The California legislature is considering Senate Bill 1005, the Health for All Act, that would expand Medi-Cal coverage to include primary and preventive care, prescription drugs, mental health care, dental care, and other routine health services for all low-income California residents regardless of immigration status. The authors examined current state and federal expenditures for health care costs for California’s undocumented immigrants, and conducted modeling using the California Simulation of Insurance Markets (CalSIM). Expanding MediCal coverage to low-income Californians regardless of immigration status would result in an estimated net increase in state expenditures between $353 and $369 million in 2015, increasing to between $424 and $436 million in 2019. This net increase in state spending is equivalent to 2 percent of projected state Medi-Cal spending, compared to an enrollment increase of 7 percent (between 690,000 and 730,000 individuals) in 2015.

The analysis includes detailed estimates of current costs (emergency services and pregnancy-related services) currently “billable” to the federal government for federal matching funds, of “take-up” or enrollment rates by those made eligible through the legislative change, and of the rate of utilization and costs (per member per month) among those newly enrolled. These costs are offset by additional fees on managed care plans for enrolling additional members, and relief of county-based obligations to provide health care services to low-income county residents.

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