California allows low-income residents to get and keep free health coverage
A provision in California’s newly approved state budget will eliminate asset testing for the 2 million Californians enrolled in both Medi-Cal and Medicare.
This article was published on Tuesday, July 20, 2021 in Kaiser Health News.
By Rachel Bluth
SACRAMENTO, Calif. – Getting clean water cost Ignacio Padilla his health insurance.
The WWII veteran had to repay the loan for the water pump installed on his 1 acre property in rural Tulare County, the only source of water for his mobile home. He carefully set aside a few thousand dollars to be able to take advantage of it – only to find that those savings allowed him to exceed the asset threshold to stay on Medi-Cal, California’s Medicaid program for low-income people. . He was excluded from the health insurance program in 2019.
It was not an emergency at the time. Padilla was still covered by Medicare and the Department of Veterans Affairs, and he could lead an independent life, even so far away.
But now Padilla is 95 and suffers from congestive heart failure. His children try to get him to take over Medi-Cal so that he can possibly cover the costs of nursing home care.
His eldest daughter, Emily Ysais, fears that Padilla’s finances – limited as they are – will disqualify him again. He receives $ 1,100 a month from his pension and social security. If Veterans Affairs approves the monthly care allowance she helped her father apply for, it could cause her to exceed Medi-Cal’s “asset test” limit.
“Our hands are tied,” said Ysais, 67. “It’s hard to keep finding a way to take care of him.”
Change is coming, but maybe not soon enough for Padilla. A provision in California’s newly approved state budget will eliminate asset testing for the 2 million Californians enrolled in both Medi-Cal and Medicare, the federal health insurance program for people aged 65 and over and people under 65 with certain disabilities. Instead, their financial eligibility will be based purely on income, as is the case for the millions of other people at Medi-Cal.
Eliminating the test will be a game-changer for aging or disabled Californians who need long-term care but are caught in a common conundrum: They don’t earn enough to cover the high costs of continuing care in nursing homes and cannot not rely on Medicare, which does not cover extended stays in nursing homes. They can get this care through Medi-Cal, but they should wipe out their savings first.
The 2021-2022 state budget agreement includes several provisions that will make it easier to access and maintain Medi-Cal, including the removal of the asset test. All people aged 50 and over will be eligible, regardless of their immigration status. And new mothers will be allowed to stay on Medi-Cal for a year after giving birth, instead of 60 days.
The budget also includes $ 15 million over the next three years, starting this year, to develop online registration forms and translate them into multiple languages, and $ 8 million for counties to help some people. who obtain home care to remain enrolled.
California has a high participation rate for Medi-Cal, with 95% of eligible people enrolled, said Laurel Lucia, director of the healthcare program at the Center for Labor Research and Education at the University of California-Berkeley. But of the remaining uninsured people, about 610,000 are eligible for Medi-Cal, she said.
“We are doing well, but so many people are eligible and not signed up,” Lucia said. “The barriers to Medi-Cal enrollment and retention are really multifaceted, so the solutions must be too. “
It’s a particularly volatile time for the program, which covers 13.6 million Californians. The state is trying to improve the quality of care by renegotiating its contracts with managed care insurance companies. At the same time, Governor Gavin Newsom and the State Department of Health Services are proposing a massive overhaul that would provide more services to the homeless and incarcerated and strengthen mental health care.
Meanwhile, Medi-Cal registrations continue to grow: State officials estimate registrations will increase to 14.5 million in this fiscal year, which began July 1.
The changes to Medi-Cal that were approved in the budget include an expansion that Democratic lawmakers have been pursuing for years: California already allows eligible unauthorized immigrants up to the age of 26 to receive full benefits. Medi-Cal services. Starting next spring, this will extend to people aged 50 and over.
State officials estimate that around 175,000 people will register in the first year, with an additional 3,600 people registering each year thereafter, ultimately costing the state $ 1.3 billion per year. .
And, from next July, new mothers will be able to stay on Medi-Cal for up to a year after giving birth. By 2027, the additional coverage is expected to cost the state around $ 200 million per year.
Republican Assembly leader Marie Waldron (R-Escondido), who has said she supports expanding program eligibility under limited circumstances, was the author of a bill allowing people in prison to register before their release which has finally been included in the budget and will come into force in 2023.
But she said the changes in this year’s budget go too far.
“Expensive government-run health care doesn’t really work, and most voters don’t want to pay for it,” Waldron said. “But California Democrats seem to think everyone will like him once they get there, which is not true. It’s rampant socialism.”
The elimination of the Medi-Cal active test for older Californians and those with certain disabilities, which takes effect on July 1, 2022, marks a radical change in the program. Officials estimate it will cost the state around $ 200 million per year when fully implemented due to increased enrollment.
Currently, these people cannot benefit from Medi-Cal if they have saved more than $ 2,000. For couples, it’s $ 3,000. Complicated rules dictate what counts as an “asset” and what doesn’t: a house doesn’t count and neither does a car, but a second car does. Engagement rings and heirlooms are fine, but other jewelry counts towards the limit.
Ultimately, the test favors individuals and families who can navigate the rules and find ways to hide money in exempt accounts, said Claire Ramsey, senior counsel at Justice in Aging.
“You create administrative barriers, which artificially keeps people out of the program,” Ramsey said. “If it’s hard for lawyers to understand all the rules, what does that mean for the average person who is just trying to get health insurance? “
The federal Affordable Care Act eliminated the asset test for most Medicaid registrants, basing financial eligibility exclusively on income, but left out those who qualify for Medicaid and Medicare.
This is especially important when it comes to expensive long-term care, like nursing homes, which can cost $ 10,000 per month, said Patricia McGinnis, executive director of California Advocates for Nursing Home Reform.
Medicare only covers nursing home care in limited circumstances and up to 100 days. After that, patients have to find another way to pay, either out of pocket or through Medi-Cal. Because many people do not qualify for Medi-Cal if they have too much money or other assets, they must spend their savings and dispose of their possessions before they can participate in the program.
“Thousands and thousands of people have become impoverished to afford nursing home care,” McGinnis said. “Do you want free medical care? You’re going to have to spend every penny you have to get them. “
A state assembly analysis estimated that an additional 17,802 Californians would have become eligible in 2018 had asset testing not been required. Of those, 435 were in long-term care, and during the year, 263 spent their money or donated their assets to qualify for Medi-Cal.
Assembly member Wendy Carrillo (D-Los Angeles), the author of the asset testing bill that went into the budget, sees eliminating the requirement as part of a more broad towards universal coverage, in line with efforts to extend Medi-Cal to older people. unauthorized immigrants or establish a single-payer system.
“We need to work aggressively and proactively on legislation that covers more people,” Carrillo said. “And until we have universal health care, these are the necessary steps to ensure that.”
This story was produced by KHN, which publishes California Healthline, an independent editorial service of the California Healthcare Foundation.
Kaiser Health News is a national health policy news service that is part of the non-partisan Henry J. Kaiser Family Foundation.