Covering the uninsured left behind by ACA


Photo: Rosa Ramirez/California Health Report

Millions of Californians will remain uninsured after the signature reforms of the Affordable Care Act roll out in 2014. Legislators are proposing an employer-funded trust to insure many of those who will likely fall through the cracks of the Affordable Care Act.

Assemblyman Manuel Perez introduced Assembly Bill 175, which would establish a trust fund, paid for by employers, private donors and philanthropic organizations, to provide comprehensive health insurance coverage, including primary care, dental and mental health benefits, to workers who are not covered by the ACA or the proposed expansion of Medi-Cal.

The bill proposes that the California Department of Health Care Services administer the fund and nonprofit community health centers would apply to the trust for money to serve the number of uncovered workers coming to their clinic for the time those workers are employed by the employers contributing to the fund.

Even after the first five years of implementation of the Affordable Care Act (ACA), three to four million people in California will probably remain uninsured, and a majority of them will be U.S. citizens or lawfully present immigrants, according to a Sept. 2012 report from the Center for Labor Research at UC Berkeley.

The report predicts that nearly 40 percent of the uninsured won’t have an affordable coverage option, which is defined by the ACA as 8 percent or less of family income. And about a third, approximately one million people, will be undocumented individuals. They are barred from buying insurance on Covered California, the state’s new health benefit exchange for individuals, families and small businesses, and from participating in the proposed expansion of Medi-Cal.

These rules may affect immigrants on the path to citizenship pending the outcome of national immigration reform. Based on the current House and Senate immigration bills, it could take them 10 to 20 years to become eligible for health care under the ACA.

In the Senate bill, agricultural workers would be eligible for ACA services after five years if they meet certain criteria to become permanent resident aliens, said Arnoldo Torres, policy consultant for the sponsors of AB 175.

But even legal residents may not have sufficient income to pay for the health plans being offered on the exchange. They may be temporary or seasonal employees who don’t work enough hours to qualify for the exchange or they may work for an employer who has less than 50 full-time employees and is not required by the ACA to offer employees insurance, said Arnoldo Torres, policy consultant for the sponsors of AB 175.

“For employers who want to cover their workers, this is another option,” Perez said. “The ACA is historical for us, …but it doesn’t go far enough.” AB 175 is expected to serve employees of small businesses, agriculture, restaurants, sales and service industries, primarily people who don’t receive health insurance through their jobs and who can’t afford to buy it on their own.

The bill is sponsored by three safety net health-care providers: Clinica de Salud del Valle de Salinas in Salinas, Clinicas Del Camino Real Inc. of Ventura and the Borrego Community Health Foundation serving San Diego and Riverside counties.

“Our objective is to create a foundation and a premise that funding for the healthcare of workers should be coming from the employers,” Torres said.

Chad Silva, director of policy for the Latino Coalition for a Healthy California, which supports AB 175, said the bill is not a finished product by any means, but that it’s a conversation starter for providing other health coverage models without using federal funds, which can limit who is eligible for coverage.

“We need to address the fundamental unfairness of allowing people to work their butts off, taking advantage of cheap labor and saying you’re good enough to work but not good enough to provide for. I think some basic health coverage is appropriate,” he said.

AB 175 also has support in concept from the California Immigrant Policy Center, the Nisei Farmers League and Health Access, a statewide healthcare consumer advocacy coalition, among others. It is one of five chosen by the Latino Caucus as priority bills, Perez said.

The California Farm Bureau Federation is waiting on the outcome of national immigration reform and for implementation of the ACA starting in January to see where all the costs settle out for growers before delving into AB 175, said Bryan Little, director of labor affairs for the Farm Bureau.

The Nisei Farmer’s League representing growers, packers and processing plants, sent a letter to Perez stating it supports the bill in concept and pledges to work with Perez’s staff. But Manuel Cunha, Jr. president of the League, worries about his members’ ability to contribute to the trust fund on top of anticipated employer cost increases due to the ACA. He has some of his own ideas about how to fund the trust and looks forward to the day when his industry will have healthy families and workers who aren’t afraid to go to the doctor or hospital.

The California Immigrant Policy Center in Sacramento raises some pointed concerns about the legislation.

“We definitely support the bill in concept. But we’re very concerned about privacy and confidentiality protections,” said Ronald Coleman, Government Affairs Manager for the California Immigrant Policy Center in Sacramento. He said information could be misused, exposing employees to various federal enforcement programs.

In an April 17th letter to Richard Pan, Chair of the Assembly Health Committee, the Immigrant Policy Center stated that it would be difficult to get employers to contribute to the trust because in so doing they might be admitting to hiring undocumented workers. But if such a fund did exist, the Center believes it should be required, not voluntary, for employers to contribute to the fund in return for a possible state tax credit.

Perez acknowledges these concerns.

“Obviously we want to be careful,” he said. “By no means do we want a negative consequence,” such as people getting deported, he added.

The Western Growers Association (WGA), a large agricultural trade group, based in Irvine, has worked with the author of the bill and is interested in the concept, said Wendy Fink-Weber, senior director, communications for WGA.

WGA is also working on health-care options for its members. The ACA mandates that employers of 50 employees or more must offer an affordable health plan for their workers. If the employee’s premium is greater than 9.5 percent of household income, the employer pays a penalty.

For decades WGA has offered limited benefit health coverage called “mini-med” plans. Employers buy them for their seasonal or low-wage workers. They provide capped coverage at a low level, often between $25,000 and $250,000 for a healthcare event, but not enough for catastrophic coverage. A lot of these plans have low or no co-pays.

But these types of plans will go away by the end of the year. ACA mandates that no health insurance plan put an annual cap on coverage.

Jonathan Alexander, compliance counsel for WGA, said any new plans will cost substantially more than mini-med plans.

The Association is negotiating with clinics and hospitals for better prices and hopes to develop plans that may have a $1,000 deductible, a limited provider network, no co-pays and an assortment of primary care, dental and mental health care benefits, Alexander said. And because this is through private, not public insurance, both legal immigrants and undocumented workers can use them, said Fink-Weber.

Finding something affordable for both employers and employees will be tricky. Some WGA members have said they’ll just drop coverage for their employees and pay the federal penalty, Alexander said. But most are not, he added.

“Others say we understand this is the law, it’s here to stay, help us find something that will work for us.”

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