Medi-Cal, the state’s safety net health program, isn’t free for everyone.
More than half a million of California’s lowest-income children, pregnant individuals and working disabled adults are required to pay health insurance premiums, ranging from $13 a month to as much as $350.
That may change this year under two proposals being floated in Sacramento. Both plans aim to align with the latest trend in public health – to provide the most access to those who need it with as little burden as possible.
Under one proposal, Gov. Gavin Newsom’s budget would spend $59 million this year and $89 million annually to reduce Medi-Cal premiums to zero. This move keeps premiums on the books, leaving open the possibility a future administration could start charging again.
Meanwhile, Assemblymember Joaquin Arambula, a Fresno Democrat, introduced a bill this week that would completely eliminate premiums for all Medi-Cal recipients.
“This is a relic of the past. It’s not consistent with where health care coverage is going, which is to be more inclusive,” said Arambula. “It also flies contrary to California’s goals in terms of public health and threatens the economic security of individuals and families from across our state.”
The pandemic focused new attention on Medi-Cal premiums when the Department of Health Care Services began offering a COVID-19 premium waiver, allowing families and individuals to remain on the program without making payments throughout the health crisis. But the waiver is not automatic; families must call and ask for it. Since the waivers were created in March of 2020, fewer than half of those paying premiums have received them, according to department data.
Some 13 million of the state’s lowest-income residents receive Medi-Cal, with about 4% required to pay premiums.
For Martha Antonio of Madera, the $26 a month she has paid for two of her kids could have covered part of her water bill or a grocery bag of food for her family of five. Antonio and her husband are farmworkers. They have paid premiums on and off for years because their work is seasonal and their income fluctuates. Just before the pandemic, their income decreased and their premiums stopped.
Antonio said she is worried her family will soon be on the hook for premiums again. Later this month, her Medi-Cal eligibility will be re-evaluated.
“Even though it’s not a lot, it’s just $26 a month, we pay rent, water, food and everything so that may not be a lot for them but it is for us,” she said. “It could be half a bill or something we need for the kids. Everything is so much more expensive this year.”
California is one of only four states charging premiums for children in its Medicaid program, known as Medi-Cal in California, according to an analysis by the Kaiser Family Foundation.
Depending on the program, premiums cost $13 or $21 per child per month, with a cap of $39 or $63 for three children or more. Pregnant individuals are charged 1.5% of their annual household income, and working disabled adults pay between $20 and $350 a month, depending on their income and household size, according to the Department of Health Care Services, which administers the Medi-Cal program.
The premiums, however low they may seem, can be the difference between a child or disabled adult receiving timely health care, said Mike Odeh, senior director of health for Children Now. The child advocacy organization is sponsoring Arambula’s bill.
“It’s easy to say $13 looks modest, but when we look at the cost of living I don’t know how anyone pulls that off,” Odeh said. “When we look at the real cost of living and what it actually costs for housing, transportation and food, families at those income levels are literally thousands of dollars annually under water.”
Odeh said the premiums are in stark contrast to the hefty state subsidies given to middle- and upper-income families enrolled in the Covered California insurance exchange.
“There became an inequity,” Odeh said. “Higher-income individuals were paying less for Covered California, but lower-income families on Medi-Cal were paying premiums.”
Premiums for pregnant people or families with children begin at 160% of the federal poverty level. For a family of three, that starts at roughly $35,000 a year. Disabled working adults earning up to 250% of the federal poverty level also pay premiums. The federal poverty rate for a family of three is $23,000.
In California, premiums for kids and pregnant individuals were created in the 1990s and early 2000s. Separately, disabled adults began paying premiums in 2009.
Since then, much has changed in how the state approaches health care, said Shannon McConville, a researcher for the Public Policy Institute of California. The government-run premium programs originally operated independently and were for families earning a little more than those who qualified for regular Medi-Cal. Then, in 2012 and 2014, the programs were absorbed into Medi-Cal but the premiums continued.
“The outlook has evolved,” McConville said. “Back in the day, we would make it harder for people to get on Medi-Cal to save money. That has shifted in the last decade to, ‘now get everyone covered and we don’t want to have barriers or administrative burden.’”
For the working disabled, the premiums can be an extra hardship, said David Kane, senior attorney for the Western Center on Law and Poverty, which is co-sponsoring Arambula’s bill.
“Those are people who have a disability but still manage to get through things and find part-time work,” Kane said. “They are still low-income, have low resources and are having to pay a significant share of their limited income to have health care. They could use that money to meet other necessities.”
Eliminating the premiums is likely to create more stable coverage for families over time, regardless of whether their income inches up or down, said Nadereh Pourat, associate director of the UCLA Center for Health Policy Research.
“It’s a good idea for those children not to cycle in and out, and the parents don’t have to worry about losing coverage if they can’t afford it in a given month,” she said.
Because of the pandemic, recipients do not lose health coverage for failing to pay premiums, according to the Department of Health Care Services. Under normal circumstances, two months of missed payments triggers a drop from coverage.
The department did not provide data on how many families lost benefits because of missed premium payments before the pandemic. The department also did not provide a staff member for an interview.
But the department appears in favor of eliminating premiums.
Jacey Cooper, who oversees Medi-Cal for the Department of Health Care Services, testified before the Assembly Subcommittee on Health this week about Newsom’s premium reduction proposal. She said that the premiums create barriers to access and can lead to breaks in coverage.
“This premium requirement places an undue economic burden on individuals and families that are already living on limited incomes and are restricted in the pursuit of substantial gainful employment due to a disability,” Cooper told the panel.
While officials in Sacramento consider ending premiums, recipients still have to request a waiver if they need help.
The waivers should have been automatic for all recipients, said Lynn Kersey, executive director of Maternal and Child Health Access, based in Los Angeles. Waivers are already automatic for those experiencing natural disasters, such as wildfires.
“For families there is not even a little bit of extra money, so they decide ‘if this gets paid then shoes don’t get bought’ or other things don’t get paid for,” Kersey said.
Waiver details are being sent in flyers to recipients with their monthly bills, the department wrote in an email. The flyers are in the language selected by the recipient for communication.
Even so, Odeh of Children Now says it’s a lot of hoops for recipients to jump through during a stress-filled pandemic for what is ultimately not much money for California.
The state collected $63.7 million in premiums in 2020 and $48 million in 2021, according to data from the Department of Health Care Services. Another $1.5 million in premiums was collected from the disabled worker program in each of the last two years.
However, an analysis by Children Now found that, of those millions collected in 2020, the state kept only about $8 million after paying an outside vendor to manage billing and collection and other administrative costs.
For Toni Callwood, getting to keep the $135 her family has previously paid in premiums each month means her family can do a little more at home and in their community of Long Beach.
Callwood usually pays $125 a month through the disabled worker program because she has multiple sclerosis. She pays an additional $10 a month for her 10-year-old son to have Medi-Cal. The family is not paying premiums right now because Callwood’s husband’s income dropped during the pandemic.
Like Antonio in Madera, Callwood is worried an upcoming eligibility review could bring back premiums or, her biggest fear, result in losing Medi-Cal altogether.
“The problem is you have to be pretty poor to qualify for it, so we have to stay as poor as possible so I can continue to get my health care,” she said. “We are in the trap of too much, too little.”