California explores private insurance for immigrants lacking legal status. But is it affordable?

Reviewed by Emily Henderson, B.Sc.Feb 27 2023

A doctor found cysts in Lilia Becerril's right breast five years ago, but the 51-year-old lacks health insurance. She said she can't afford the imaging to find out if they're cancerous.

Becerril earns about $52,000 a year at a nonprofit in California's Central Valley, putting her and her husband, Armando, at more than double the limit to qualify for Medi-Cal, the state's Medicaid program for people with low incomes and disabilities. Private insurance would cost $1,230 a month in premiums, money needed for their mortgage.

"We've been resorting to home remedies to get through the pain," Becerril said through a Spanish translator. Her husband has needed hernia surgery for 20 years. "It's frustrating because we pay our taxes, but we can't reap any of the benefits of where our taxes are going," she added.

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.

Both elements are essential for immigrants lacking legal status, said Jose Torres Casillas, a policy and legislative advocate with Health Access California, a consumer health group working with Arambula's office on the measure.

"Access is one thing, but affordability is another," Torres Casillas said.

Since taking office in 2019, Newsom has approved expanding Medi-Cal to all qualified residents regardless of immigration status. In doing so, the politician continuously rumored to be preparing for a presidential bid described the state as moving "one step closer" toward universal health care. But in January, Newsom announced a $22.5 billion state deficit and made no mention of new proposals for the state's estimated 3 million uninsured residents.

Newsom's health secretary, Dr. Mark Ghaly, acknowledged the pressure to go further but he would not commit to a timeline.

"Up until now we've had so many other things to focus on," Ghaly said. "This will become, frankly speaking, one of the most important next issues that we take on."

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."

California officials have previously considered allowing all immigrants to buy insurance from its state-run program before, submitting a request to the federal government in 2016. But the state rescinded its application after President Donald Trump took office, given his anti-immigration rhetoric and policies.

The Biden administration in December approved an exception to federal law for Washington state — a game changer in the eyes of immigration advocates, said Rachel Linn Gish, a spokesperson for Health Access.

"Seeing what other states have done and the waivers that are happening under Biden, it makes a huge difference in our approach," she said.

But even if lawmakers pass a plan to open California's insurance marketplace to all immigrants regardless of status, advocates said the state will have to wait until Jan. 1, 2024, to ask the federal government for permission, and it could take half a year or longer to get a response.

That means it could be years before Becerril can get coverage. Instead, she's preparing for the worst.

"I'm paying for funeral coverage," she said. "It's more economical than paying the health coverage premium."