Democratic State Sen. Ricardo Lara (D-Long Beach) Wednesday estimated that it would cost more than $350 million next year to implement his legislation that would expand Medi-Cal coverage to people in the US illegally. The cost would rise to more than $420 million by 2019, according to Lara's estimate.
Lara's bill, SB 1005, has been working its way through the state legislature since February. Wednesday's cost projection did not include a plan for how the state would pay to expand Medi-Cal to those without legal status.
The bill would also create a health insurance marketplace, where those without papers who earn too much to qualify for Medi-Cal could buy private coverage with the help of a subsidy from the state. Wednesday’s projections did not include cost estimates for that portion of the bill, although an analysis by the state senate appropriations committee pegs that cost at $20 million to $40 million a year.
Expanding Medi-Cal would cost between $353 and $369 million next year, representing a roughly two percent increase in state spending on Medi-Cal, according to the projection. The cost would increase to between $424 and $436 million by 2019, it said.
The cost estimate, compiled by researchers at UCLA and UC Berkeley, assumes that roughly half of an estimated 1.4 to 1.5 million Medi-Cal-eligible uninsured people who lack legal status would actually sign up within five years.
The UCLA and UC Berkeley researchers estimated that Lara's bill would add between 690,000 and 730,000 people to the Medi-Cal rolls in 2015, growing to an increase of between 750,000 and 790,000 in 2019. That would reduce the total number of uninsured in California by about one quarter, according to the estimate.
"You’re probably increasing the number of people on Medi-Cal by seven percent, but you’re only increasing the budget outlay by two percent," said UCLA professor Dylan Roby, who worked on the cost estimate. He said that’s because immigrants living in the country illegally tend to be younger and healthier than the general population, making them less expensive to insure.
"So from a state perspective, seems like a pretty good return on investment," Roby said. The estimate takes into account increased sales tax revenue from the managed care organizations expected to insure the immigrants, and savings from reduced county spending on providing emergency room care to the uninsured.
A spokesman for Senate Republican Leader Bob Huff (R-Brea) said he would have no comment on the bill. State Sen. Mike Morrell (R-Redlands), a member of the senate health committee, was not immediately available for comment.
Senate Bill 1005, also known as the Health For All Act, is Lara’s effort to provide coverage for the last large remaining group of uninsured residents of California. Immigrants without legal status are ineligible for benefits under the Affordable Care Act.
The question of how to pay for the bill looms large in the debate over its fate.
"That’s been one of the challenges and things we keep hearing from legislators: 'Well, how do we pay for the costs?'" said Jeff Brewer, policy specialist at the California Partnership, a nonprofit advocating for Lara’s bill. "Whether it’s a lot or a little, we still want to identify how."
Senate President Pro Tem Darrell Steinberg (D-Sacramento) has not revealed how he will ultimately vote on the bill. Budget considerations will be key in determining Steinberg’s stance, said spokesman Mark Hedlund.
"He’s supportive of the policy but recognizes a significant cost, and is weighing it from a fiscal perspective in light of other budget priorities this year," spokesman Mark Hedlund said.
On Friday, Lara’s bill faces a key vote in the senate appropriations committee.
If the bill clears the appropriations committee, it will move to the Senate floor.
A spokesman for Gov. Jerry Brown would not comment on Brown's stance on the bill, because it is still pending.
More than 100 organizations, including nonprofit health advocates, unions, and the city of Los Angeles, have endorsed the bill. Only one group, Californians for Population Stabilization, has registered opposition.
This story has been updated.