Summary of California’s §1332 Waiver Application

Summary of California’s §1332 Waiver Application at


§1332 waivers allow states to waive specified provisions of the Affordable Care Act as long as they are cost neutral to the federal government, cover at least as many people as are already eligible, cover at least as many services as are already covered and are at least as affordable as the ACA. California’s waiver would seek federal approval so that the state Exchange (Covered California) can offer mirror coverage opportunities for the undocumented, but without any federal or state premium assistance or out pocket assistance. The request is dated September 30, 2016.

The Affordable Care Act is quite explicit -- the undocumented residents of the United States do not qualify for federal subsidies under the Exchanges or for federal financial participation for full scope Medi-Cal coverage. Under SB 4, California recently covered an estimated 175,000 low income undocumented children through Medi-Cal but with exclusively state funds for all but the necessary emergency services (for which a federal match is available). In SB 10 and the proposed waiver, there are no state funds, nor any federal match for coverage of the undocumented.

California is home about 2.5 million overwhelmingly working undocumented residents; of whom about 1,5 million are uninsured. (Many are long time residents of California.) The remainder of the undocumented are for the most part covered through their own work or that of a spouse or parent. An estimated 100,000 buy individual coverage on the open market with no federal or state financial assistance.

California’s proposal would allow undocumented individuals to buy coverage offered by Covered California, but with no federal or state assistance. That means that most enrollment (estimated close to 60%) would be among higher income (above 266% of FPL) uninsured undocumented workers.

It is estimated that between 0 and 28,000 uninsured undocumented would apply; the state’s best estimate is that 18,000 heretofore individuals would be covered. The estimate of zero enrollment is for two reasons: 1) the undocumented can and already do buy the same plans on the open market, and Covered California offers no price advantage; 2) the undocumented fear any involvement with public programs which they fear could lead to their deportation. On the other hand, the rationale for the SB 10 legislation and waiver proposal is that those who live in mixed status families (one legal spouse, one undocumented spouse and legal resident children) will find it far more convenient and attractive to enroll together as an entire family through Covered California.

The actuarial analysis points out that the undocumented, when covered, use far fewer (35% less) services than do US citizens and long time residents. Therefore their participation in individual coverage has the potential to marginally reduce the over-all cost of coverage; however the participation will be so small as to make little practical difference in premiums.

Senator Clinton has spoken favorably about such a proposal while Mr. Trump has recommended wholesale deportation of all the undocumented in the United States.


Prepared by: Lucien Wulsin

Dated: 10/4/16


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