California Moves Toward Offering Full Price Coverage to Ineligible Immigrants in its Marketplace

By Sonya Schwartz, Georgetown University Center for Children and Families

Governor Brown recently signed into law SB 10, a bill that requires Covered California—the state’s health insurance marketplace—to request a waiver from the federal government to allow immigrants who are currently ineligible to purchase marketplace coverage. If the waiver is granted, immigrants who are not lawfully present would be allowed to purchase health coverage at full price and without federal subsidies through Covered California. This blog post answers some common questions about SB 10.

When would coverage take effect? Under SB 10, nothing will change now or in time for the 2016-2017 open enrollment period. The passage of SB 10 is one step in the process of seeking a federal waiver under section 1332 of the Affordable Care Act (ACA). If California’s 1332 waiver is approved by the U.S. Department of Health and Human Services (HHS), health plans would be required to prepare to offer coverage on January 1, 2018, but the coverage would not start until January 1, 2019.

Why does California need a waiver to offer coverage at full cost to additional immigrants? Section 1312 (f)(3) of the ACA specifies that individuals who are not citizens or are not lawfully present in the United States must not be covered under a qualified health plan offered in the marketplace. A section 1332 waiver allows states to ask HHS to waive specific, enumerated, sections of the ACA, including section 1312. So, technically, California will ask HHS to waive the requirement the section 1312 requirement that the marketplace offer qualified health plans only to citizens or lawfully present immigrants. States, however, cannot waive another section of the ACA (section 1412(d)) that specifies that “no federal payments, credits or cost-sharing reductions for individuals who are not lawfully present in the United States.” So, Covered California will not be allowed to provide federal subsidies that make coverage more affordable for immigrants who are not lawfully present.

If the federal waiver is approved, how will this work? If a federal waiver is granted, the state would require that all health plans—that currently offer a qualified health plan in the individual market to citizens and lawfully present immigrants—also offer “California qualified health plans” to currently ineligible immigrants. “California qualified health plans” available through the waiver will be virtually the same as qualified health plans offered now, and must meet all the same requirements.

Will offering coverage at full price in Covered California result in more immigrants who are not lawfully present gaining coverage? Many families in California include members with different immigration statuses. If granted, the waiver would allow mixed status families to apply for, review, and weigh health coverage options together. This may help members of the family who were afraid to navigate the private market and purchase on their own in the individual insurance market. SB 10 also codifies existing privacy protections for applicants who will have to provide information only to authenticate their identify and determine eligibility. It requires anyone who directly or indirectly receives information provided by the applicant to only use this information for the purposes of ensuring efficient operation of Covered California. However, because applicants who are not lawfully present would not receive subsidies to help pay for their individual coverage, coverage will continue to remain unaffordable for many.

Editor’s Note: This post was originally published on CCF’s Say Ahhh! Blog.

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