California Explores Private Insurance for Immigrants Lacking Legal Status. But Is It Affordable?

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While many Californians who earn too much to be eligible for Medi-Cal can get subsidized coverage through Covered California, an estimated 460,000 residents aren’t allowed to buy insurance through state-run insurance plans under the Affordable Care Act because they lack legal status. One Democratic lawmaker says it’s a small but glaring gap and is crafting a bill that could test Democratic Gov. Gavin Newsom’s commitment to reach universal health care.

“We’re going to need to figure out how to provide universal coverage for all who call this state home,” said the bill’s author, Assembly member Joaquin Arambula. “It’s an area our state has not leaned into enough, to provide coverage for those who are undocumented.”

Arambula’s bill would direct the state to ask the federal government to allow immigrants living in the state without authorization to get insurance through Covered California. Arambula sees the move as the critical first step to expand coverage. If approved, the Fresno lawmaker intends to push for state subsidies to help pay for insurance.

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California needs permission from the federal government to open Covered California to immigrants without legal residency because it is currently closed to them, and Arambula said he is in talks with Newsom administration officials about how to structure the bill.

Once the federal government opens Covered California up to all migrants, the state could set aside funding for subsidies. About 90% of enrollees in Covered California qualify for financial assistance, which is paid for with both state and federal funds. Since 2020, the state has spent $20 million a year on those subsidies, a fraction of the cost, because Congress has given states an infusion of money during the pandemic.

Previously, lawmakers had allocated roughly $300 million to lower insurance premiums for Covered California enrollees. Any financial assistance to people living in the state without authorization would likely have to come from state funds, and the costs could vary widely.

For instance, Colorado enrolled 10,000 such immigrants into a new insurance program designed solely for them at a cost of $57.8 million in state funds, said Adam Fox, deputy director of the Colorado Consumer Health Initiative. The program covered the full cost of insurance for enrollees.

In Washington state, immigrants who lack legal status can take advantage of a state fund next year to help all income-eligible state residents pay for insurance, said Michael Marchand, chief marketing officer for the Washington Health Benefit Exchange. State lawmakers have added $5 million to the fund for immigrants without legal authorization.

“It would serve as an incentive for additional undocumented immigration into our country,” said Sally Pipes, president and CEO of the Pacific Research Institute, a think tank that advocated against Medi-Cal expansion to immigrants without legal standing. “And put taxpayers on the hook for additional government health care costs and the inevitable higher tax bills to pay for them.”

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