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Increasing Access to Healthcare Reduces Poverty, Policy Group Finds

Screenshot of two women on video conference call

Patricia Malagon, left, and Caroline Danielson are two of the co-authors of the Public Policy Institute of California report “The Impact of Health Insurance on Poverty in California.” (Screenshot captured by Julia Métraux / The CC Pulse)

By Julia Métraux

In a country where just one medical emergency can cause families to experience economic instability, having good health insurance can be extremely important.

On March 30, the Public Policy Institute of California presented its research report on how health insurance affects people living in poverty in a briefing held by the institute. Federal and state healthcare policy changes have increased access to insurance and, thus, lowered poverty. At a federal level, these include the Affordable Care Act, and at a statewide level, these include subsidies for people getting health insurance through Covered California.

“Under the Affordable Care Act, anyone can receive coverage regardless of their health condition,” said Patricia Malagon, a PPIC research associate and one of the authors of the report.

However, the ACA — also largely known as “Obamacare” — has faced legislative and judicial attacks from some members of the Republican Party since it was signed into law in 2010. Just last week, United States Judge for the Northern District of Texas Reed O’Connor struck down a provision in the ACA that makes some preventative care, like PrEP, or pre-exposure prophylaxis, free.

Some may see private health insurance price drops due to subsidies, which may increase due to the Inflation Reduction Act.

“Public subsidy structures support many low- and middle-income Californians from these high health costs,” said Malagon. “These subsidies help reduce poverty by about one percentage point overall, equivalent to about 345,000 Californians who would fall below the poverty line.”

Additionally, Medi-Cal, which provides health insurance for low-income California residents who qualify, has expanded in recent years under Gov. Gavin Newsom. By January 2024, according to a press release, the state of California will expand “full scope Medi-Cal coverage to an estimated 700,000-plus adults ages 26 through 49 who do not have a satisfactory immigration status for federally funded full scope Medi-Cal.”

The financial strain of healthcare costs can affect entire families. PPIC policy director and senior fellow Caroline Danielson said that people who have undocumented and uninsured family members would likely benefit financially from Medi-Cal being expanded.

“We expect up to about a million people who are not undocumented to be affected indirectly by the expansion of Medi-Cal to the remaining adults that will occur in January 2024,” Danielson said.

>>>Read: ‘Am I Really That Sick?’ Healthcare Costs Weigh on Undocumented People

Some people, however, may lose their Medi-Cal eligibility. In March 2020, the U.S. Congress passed the First Coronavirus Response Act, which gave more money to Medicaid and also allowed people to stay enrolled in Medicaid through the end of the COVID-19 emergency.

According to the PPIC report, “millions of Californians are expected to lose Medi-Cal coverage…once the state resumes its eligibility redetermination process in spring 2023.” This process was paused in 2020 in the first wave of COVID-19.

Uninsured people are more likely to live in poverty than people on Medi-Cal, Malagon said. Among uninsured Californians, four in 10 are living in poverty.

“We would expect poverty to be higher among those with Medi-Cal since the program is designed for low-income Californians,” Malagon said. “Yet there are other factors such as access to safety net benefits, employment opportunities or barriers and varying housing costs that play a role in reducing or increasing poverty.”

Even among uninsured people, there were disparities on poverty tied to health care costs between United States citizens and people who are not.

“We can see poverty rates are highest among those more likely to lack healthcare coverage, in particular, non-citizens at 27% versus citizens at 9.1%,” said Malagon.

Healthcare costs also vary depending on where people live in the state of California.

“Health costs are lower in the southern region and higher in the Bay Area and Central Valley regions of the state,” Malagon said.

California residents who are interested to see how much they would pay for certain health insurances given their income can do so on Covered California’s website.

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