Covered California board supports innovation waiver, health insurance for the undocumented

The Board of Covered California, the state’s health insurance marketplace, has expressed support for an Innovation Waiver that would allow the state to offer non-qualified health plan (non-QHP) insurance coverage to certain undocumented adult immigrants via the exchange. Before the state could apply for such a waiver under section 1332 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), it would have to pass legislation enacting waiver authority; Senate Bill 10 (SB 10) is currently pending in the General Assembly, but faces opposition. The Board supported a phased approach that would allow the state to target one or two proposals in 2016, including the extension of non-QHPs to undocumented immigrants, but allow it to phase in other innovations over time.

ACA section 1332 permits states to request a state innovation waiver of certain ACA requirements for plan years beginning on or after January 1, 2017. Applications must include a comprehensive description of the waiver plan, along with a 10-year budget, and must allow for a public notice and a comment period that permits a “meaningful level of public input.” After such a period, the Covered California Board determined that a waiver would ultimately further the exchange’s mission of providing health insurance coverage and would simplify application procedures for California families.

Proposal

Section 1411 of the ACA limits participation in the health insurance marketplace to citizens, nationals, and lawful permanent residents of the United States, thereby excluding the undocumented from participation. The 1332 proposal would allow undocumented immigrants to purchase health insurance via Covered California, with the caveats that they could only purchase non-QHPs and would not be eligible for premium breaks or cost subsidies. The Board believed that the proposal would allow “mixed families” with members with legal and non-legal status to purchase insurance for their entire family via the marketplace, simplifying the shopping ad enrollment experience. The Board recognized, however, that such a plan might not be approved by federal officials and that, if approved, it could cause confusion in mixed families regarding subsidy eligibility.

The Board also discussed other proposals, including:

  • allowing dependents and spouses to receive advance premium tax credits if employer-sponsored dependent coverage is not affordable;
  • offering non-QHP standalone adult vision and dental plans via the marketplace;
  • offering vision and dental benefits as essential health benefits;
  • offering Medi-Cal plans via the exchange and waiving certain requirements; and
  • offering copper plans with actuarial values of only 50 percent for consumers with income above 400 percent of the federal poverty level (FPL).

Given the debate over immigration in the United States, Covered California Chair noted that the move may be “somewhat symbolic,” but noted that “symbolism is important.”