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A Little Investment Goes a Long Way: Modest Cost to Expand Preventive and Routine Health Services to All Low-Income Californians

May 21, 2014

Research Report

Authors: Laurel Lucia, Ken Jacobs, Dave Graham-Squire, Gregory Watson, MS, Dylan H. Roby, PhD, Nadereh Pourat, PhD, Gerald F. Kominski, PhD

​The Affordable Care Act (ACA) has expanded health coverage to millions of Californians and has improved coverage for millions more, but between 2.7 and 3.4 million Californians under age 65 are predicted to still remain uninsured by 2019, after the ACA is fully implemented. Of those predicted to remain uninsured, almost half — between 1.4 and 1.5 million — are ineligible for federal coverage options due to their immigration status.

This joint study uses CalSIM data to examine the economic impact on California if health coverage were to be expanded and finds that the cost of providing preventative and other care is relatively modest. Specifically, the authors find that the net increase in state spending is estimated to be equivalent to 2 percent of state Medi-Cal spending, compared to an enrollment increase of 7 percent in 2015. The new spending would be substantially offset by an increase in state sales tax revenue from managed care organizations, in addition to savings from reduced county spending in providing care to the uninsured. The net increase in state spending is estimated at between $353 and $369 million in 2015, growing to between $424 and $436 million in 2019.  And enrollment in Medi-Cal would increase by between 690,000 and 730,000 individuals in 2015, growing to an increase of between 750,000 and 790,000 in 2019. This enrollment would reduce the number of uninsured Californians by approximately one-quarter in 2019, according to the study.

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