LAO Contact
May 5, 2021
This budget and policy post responds to legislative requests for our office to estimate the costs associated with expanding comprehensive Medi-Cal coverage to all otherwise eligible Californians regardless of their immigration status. (We were not asked to provide a fiscal analysis of any particular proposed legislation, but rather were asked to provide a cost estimate of such a Medi-Cal coverage expansion. This post updates our similar earlier work that can be found here and here.) Throughout this post, as a shorthand, we refer to all those who would gain eligibility for full-scope Medi-Cal regardless of their immigration status as undocumented immigrants.
Bottom Line. Assuming a January 1, 2022 implementation, we estimate that the additional cost of expanding full-scope coverage to all otherwise-eligible undocumented immigrants would be $790 million General Fund ($870 million total funds) in 2021‑22. (We assume a half-year implementation for the first year since it takes time for the state’s Medi-Cal systems to be updated to facilitate the change in coverage.) On an ongoing basis, we estimate the additional cost of the expansion would be $2.1 billion General Fund (nearly $2.4 billion total funds). (These additional costs represent the difference between the cost of providing full-scope Medi-Cal and the costs that otherwise would be incurred by continuing only to provide restricted-scope Medi-Cal to this population. We define “full-scope” and “restricted-scope” coverage below.) We note that ongoing costs likely would grow over time in line with medical inflation and also would be adjusted to reflect changes in caseload and utilization. For example, caseload and costs could be higher than we project if the immigration of undocumented individuals to the state were to increase relative to what the state has experienced in recent years.
Historically, Undocumented Immigrants Were Eligible Only for Restricted-Scope Medi-Cal Coverage. Medi-Cal eligibility depends on a number of individual and household characteristics, including, for example, income, age, and immigration status. Historically, income-eligible citizens and immigrants with documented status generally have qualified for comprehensive, or full-scope, Medi-Cal coverage, while otherwise income-eligible undocumented immigrants have not qualified for full-scope Medi-Cal coverage. Rather, those who would be eligible for Medi-Cal but for their immigration status historically were eligible only for restricted-scope Medi-Cal coverage, which covers emergency- and pregnancy-related health care services. The federal government pays for a portion of undocumented immigrants’ restricted-scope Medi-Cal services according to standard federal-state cost-sharing rules.
Today, Otherwise-Eligible Undocumented Immigrants Under Age 26 Are Eligible for Full-Scope Medi-Cal Coverage. In 2016, the state expanded full-scope Medi-Cal coverage to otherwise eligible undocumented children from birth through age 18. Then, in 2020, the state expanded full-scope Medi-Cal coverage to otherwise eligible undocumented young adults ages 19 through 25. The cost of the above expansions from restricted-scope to full-scope coverage is almost entirely paid by the state since the federal government only shares in the cost of restricted-scope services. Currently, undocumented adults ages 26 and over currently only are eligible for restricted-scope Medi-Cal coverage.
Around One Million Californians Would Gain Full-Scope Medi-Cal Under Coverage Expansion. As shown in Figure 1, we estimate that expanding full-scope coverage to all otherwise eligible undocumented immigrants would extend full-scope coverage to 980,000 Californians in 2021‑22 and 930,000 Californians on an ongoing basis. (Figure 1 breaks down estimated caseload among four age groups.) These enrollment numbers include two distinct populations. The first population includes undocumented immigrants who currently are enrolled in restricted-scope Medi-Cal coverage who automatically would be transitioned to full-scope coverage if the expansion took effect. The second population includes undocumented immigrants who currently are eligible for but not enrolled in restricted-scope coverage who we expect would enroll in Medi-Cal as a result of the coverage expansion. As Figure 1 shows, we expect the vast majority (over 90 percent) of individuals who would gain full-scope coverage to be enrolled in restricted-scope coverage already. (We estimate that 2021‑22 caseload would be higher than ongoing caseload due to the higher Medi-Cal coverage levels that have coincided with the coronavirus disease 2019 (COVID-19) pandemic. After the acute stage of the pandemic ends, we estimate the caseload would settle in at a lower level.)
Figure 1
Estimated Full‑Scope Medi‑Cal Caseload Increase Under Coverage Expansiona
LAO Estimate
Age Group |
2021‑22 |
Ongoingb |
|||||
Enrolled in Restricted‑Scope Coverage |
Eligible but |
Total |
Enrolled in Restricted‑Scope Coverage |
Eligible but |
Total |
||
Ages 26‑35 |
213,000 |
3,000 |
216,000 |
183,000 |
13,000 |
196,000 |
|
Ages 36‑49 |
513,000 |
8,000 |
521,000 |
468,000 |
34,000 |
502,000 |
|
Ages 50‑64 |
201,000 |
3,000 |
204,000 |
185,000 |
13,000 |
198,000 |
|
Ages 65+ |
41,000 |
1,000 |
41,000 |
35,000 |
3,000 |
37,000 |
|
Totals |
967,000 |
15,000 |
982,000 |
871,000 |
62,000 |
933,000 |
|
aCoverage expansion would extend full‑scope coverage to all otherwise eligible Californians regardless of immigration status. Currently, undocumented immigrants over age 25 are only eligible for restricted‑scope coverage, which covers emergency‑ and pregnancy‑related services. bCaseload would not remain fixed on an ongoing basis but would change as enrollment of undocumented immigrants changes over time. Note: Numbers may not add due to rounding. |
Ongoing Costs Would Be Over $2 Billion Annually. Assuming a January 1, 2022 implementation date, we estimate additional costs would be $790 million General Fund ($870 million total funds) in 2021‑22. On an ongoing basis, we estimate additional costs would be $2.1 billion General Fund (nearly $2.4 billion total funds). This ongoing cost estimate reflects 2021‑22 service levels and costs. The actual ongoing cost would change over time with changes in enrollment, utilization, and service costs. Figures 2 and 3 summarize our 2021‑22 and ongoing estimated additional costs, broken out among four age groups. The additional costs of coverage expansion reflect the difference between (1) the Medi-Cal cost of providing full-scope coverage to the newly eligible population and (2) Medi-Cal costs that otherwise would be incurred if only restricted-scope coverage were maintained for this population. (The federal government continues to share in the cost of providing restricted-scope services to undocumented adults even if the state opts to provide full-scope coverage.)
Figure 2
2021‑22 Estimated Cost of Full‑Scope Coverage Expansiona
LAO Estimate (In Millions)
Cost of |
‑ |
Cost of |
= |
Additional Cost to |
||||
Total Funds |
General Fund |
Total Funds |
General Fund |
Total Funds |
General Fund |
|||
Ages 26‑35 |
$340 |
$200 |
$180 |
$50 |
$160 |
$150 |
||
Ages 36‑49 |
810 |
490 |
280 |
80 |
530 |
410 |
||
Ages 50‑64 |
330 |
200 |
230 |
70 |
100 |
140 |
||
Ages 65+ |
190 |
140 |
90 |
50 |
90 |
100 |
||
Totals |
$1,670 |
$1,040 |
$790 |
$250 |
$870 |
$790 |
||
aAssumes a January 1, 2022 (half‑year) implementation and one‑month cash lag for Department of Health Care Services costs. bEstimated costs for emergency‑ and pregnancy‑related services that otherwise would be incurred if the state did not extend full‑scope coverage to this population. Note: Numbers may not add due to rounding. |
Figure 3
Ongoing Estimated Cost of Full‑Scope Coverage Expansiona
LAO Estimate (In Millions)
Cost of |
‑ |
Cost of |
= |
Additional Cost to |
||||
Total Funds |
General Fund |
Total Funds |
General Fund |
Total Funds |
General Fund |
|||
Ages 26‑35 |
$740 |
$450 |
$370 |
$110 |
$370 |
$340 |
||
Ages 36‑49 |
1,930 |
1,190 |
630 |
180 |
1,300 |
1,010 |
||
Ages 50‑64 |
820 |
510 |
520 |
150 |
300 |
370 |
||
Ages 65+ |
600 |
500 |
200 |
100 |
400 |
400 |
||
Totals |
$4,090 |
$2,650 |
$1,730 |
$540 |
$2,360 |
$2,120 |
||
aAssumes long‑run caseload and In‑Home Supportive Services takeup levels have been reached and 2021‑22 service‑cost levels. bEstimated costs for emergency‑ and pregnancy‑related services that otherwise would be incurred if the state did not extend full‑scope coverage to this population. Note: Numbers may not add due to rounding. |
Our cost estimate is subject to many uncertainties and relies on a number of important assumptions. The following bullets summarize several of these major uncertainties and our related assumptions, which relate to both of the major components of our estimates: caseload and per-enrollee costs.
How Many Restricted-Scope-Eligible but Not Currently Enrolled Undocumented Immigrants Would Enroll in Medi-Cal? While the true number is uncertain, estimates show there likely are somewhat more than one million undocumented immigrants over age 25 living in the state who are income-eligible for Medi-Cal. Of these, nearly 900,000 already are enrolled in restricted-scope Medi-Cal coverage. A key uncertainty is how many of the more than 100,000 estimated restricted-scope-eligible-but-not-enrolled undocumented immigrants would enroll in Medi-Cal if full-scope coverage were available. Using data from the full-scope expansion for undocumented young adults ages 19 through 25, we estimate that the availability of full-scope coverage increased enrollment among undocumented young adults by about 7 percent above what it would have been if only restricted-scope coverage had been available. We assume that older age groups would experience comparable enrollment increases if full-scope coverage were available.
How Many Undocumented Immigrants Would There Be in Each Age Group? Another uncertainty is how many undocumented immigrants there are within each age group. (This is important for estimating the cost of the coverage expansion since older Medi-Cal enrollees tend to have higher costs.) For our projections, we use Medi-Cal restricted-scope enrollment data to determine the proportions of undocumented immigrants in each age group. The primary uncertainty here relates to the ages of those who are currently eligible for restricted-scope coverage but not enrolled. We assume that additional enrollment from the eligible-but-not-enrolled population would be proportional across the age bands.
What Would the Trends in Undocumented Immigrant Enrollment Be Over Time? The 2021‑22 and ongoing costs for such a coverage expansion would depend on how enrollment changes over time. For example, over the last year during COVID-19, restricted-scope enrollment among undocumented immigrants has increased significantly. Were the Legislature to expand coverage, we project that much of the higher restricted-scope enrollment seen during the pandemic would apply to the new full-scope population and would continue for the most of calendar year 2022, after which enrollment would return to roughly pre-pandemic levels and trends. We also note that migration patterns could affect enrollment over time. For example, if the immigration of undocumented individuals to the state were to increase going forward, the ongoing caseload and costs associated with this coverage expansion could be higher than we project.
What Would Per-Enrollee Costs Be? Uncertainty around costs per enrollee is potentially greater than that surrounding the caseload estimates. To project per-enrollee costs, we use data on per-enrollee costs for current full-scope Medi-Cal enrollees from a prior year, which we trend forward to 2021‑22. (Both our 2021‑22 and ongoing cost estimates assume service costs are at 2021‑22 levels.) However, for various reasons, we expect that per-enrollee full-scope costs for undocumented immigrants would differ on average from current full-scope enrollees. For example, research on the health of the U.S. and California populations shows that immigrants, including undocumented immigrants, have lower disability rates than other residents. In Medi-Cal, enrollees with disabilities can be two to ten times more costly on a per-enrollee basis than other enrollees. Below, we further describe the uncertainties and our assumptions related to the two major programs where costs per enrollee would increase as a result of the full-scope expansion.
Department of Health Care Services (DHCS) Medi-Cal Per-Enrollee Costs. Medi-Cal—as directly administered by DHCS—covers most but not all health care services used by Medi-Cal enrollees, including, but not limited to, hospitalizations, doctor visits, prescription drugs, and nursing home care. The costs of these and other services fall under the Medi-Cal budget. To project the DHCS Medi-Cal costs of the full-scope expansion, we assume that undocumented immigrants would have similar per-enrollee costs as current full-scope enrollees of a similar health status. We assume that the costs for undocumented immigrants, on average, generally would be more similar to less costly Medi-Cal enrollees rather than more costly ones, the latter of which include those with disabilities. We do so because the vast majority of restricted-scope enrollees (most of whom are undocumented) fall within Medi-Cal’s lower-cost population groups, such as families and childless adults. By way of comparison, we estimate that 4 percent of restricted-scope Medi-Cal enrollees (most of whom are undocumented immigrants) are over age 64 or disabled, whereas around 18 percent of current full-scope enrollees are over age 64 or disabled. Given these estimates, we assume that Medi-Cal per-enrollee costs to expand full-scope coverage to otherwise eligible undocumented immigrants would be around $330 per month (averaged across all age groups). This contrasts to a comparable average cost per enrollee among all current full-scope enrollees of around $500 per month. DHCS Medi-Cal costs overall account for about 80 percent of the estimated additional costs of the full-scope coverage expansion.
In-Home Supportive Services (IHSS) Per-Enrollee Costs. The IHSS program—administered by the Department of Social Services—provides personal care and domestic services to seniors and persons with disabilities enrolled in Medi-Cal to help them remain safely in their own homes and communities. Restricted-scope Medi-Cal enrollees generally are not eligible for IHSS while full-scope enrollees are eligible provided they meet IHSS eligibility rules. (Because IHSS services are not emergency- or pregnancy-related, the federal government does not share in their costs.) Projecting the extent to which undocumented immigrants would utilize IHSS comes with significant uncertainty. We assume undocumented immigrants would utilize IHSS, on average, at lower rates than existing full-scope Medi-Cal enrollees due to undocumented immigrants generally being younger and having lower rates of disability. Accordingly, we assume undocumented immigrants would use IHSS at similar rates as comparable current full-scope Medi-Cal enrollees. That is, we assume undocumented immigrants under age 65 largely would have similar per-enrollee IHSS costs to families and childless adults currently enrolled in full-scope Medi-Cal. Families and childless adults, in contrast to enrollees with disabilities, have lower IHSS costs on average. We assume undocumented immigrants 65 and older would have similar per-enrollee IHSS costs to current senior enrollees in full-scope Medi-Cal. Overall, IHSS costs account for about 20 percent of the estimated additional costs of the full-scope coverage expansion.
While this cost estimate is based on currently available data about the otherwise-eligible undocumented immigrant population, there is uncertainty about the number of undocumented adults who would enroll in Medi-Cal under this coverage expansion, and about the per-enrollee costs of expanding coverage to this population. This estimate is meant to inform the Legislature of the potential additional costs of this coverage expansion. We did not take into account the fiscal impact of any change in other state and local health care programs that might occur due to this coverage expansion. For example, our caseload estimate generally assumes no major changes in the overall size of the state’s undocumented population. Additionally, we did not account for any fiscal impacts on local mental health program costs. Finally, we understand that there likely would be minor state administrative costs (largely one time and in the low millions of dollars or less) to implement the coverage expansion. This analysis does not capture these administrative costs. Under our estimate, expanding Medi-Cal coverage to all otherwise-eligible undocumented immigrants would increase the Medi-Cal caseload by about 7 percent over the current level. Because this expansion would increase Medi-Cal caseload, it likely would have the effect of increasing the amount of General Fund needed to fund future policy changes in Medi-Cal that increase service costs.