The State of Health Insurance in Los Angeles

1. The State of Health Insurance in Los Angeles E. Richard Brown, PhDDirector, UCLA Center for Health Policy ResearchProfessor, UCLA School of Public HealthPrincipal Investigator, California Health Interview Survey LA Health CollaborativeLos AngelesApril 18, 2005

2. What I will cover • California’s health insurance • What’s gone up and what’s gone down? • What’s happening with job-based insurance coverage? • Why is job-based coverage changing? • Who is most affected by this pattern? • Opportunities for public coverage of the currently uninsured • Past and present as prologue?

3. Acknowledgements • Thanks to the funders of the work on health insurance coverage that we get to do in the UCLA Center for Health Policy Research • The California Endowment • The California Wellness Foundation • Thanks to colleague Shana Alex Lavarreda

4. 2.1 million Los Angeles County residentsuninsured all or part of year in 2003 • One in four LA residents under age 65 uninsured, compared to about one in five for California as a whole • Larger proportion of uninsured in LA are uninsured all year • LA-California difference driven by LA’s proportion with job-based insurance • Medi-Cal covers slightly larger proportion of LA residents Ages 0-64 Source: 2003 California Health Interview Survey

5. California adults and children lost job-based insurance, but children were protected by public programs • A significant drop in job-based insurance for children and adults in California • Down 2.1 percentage points for adults under age 65 and down 3.9 percentage points for childrenstatewide in 2003, compared to 2001 • In LA, job-based insurance statistically unchanged • A significant increase in children’s enrollment in Medi-Cal and Healthy Families • Up 5.0 percentage points for children in California and up 4.4 percentage points in LA — but adults’ Medi-Cal enrollment statistically unchanged • A small but significant increase in other coverage for children and adults • Up 1.7 percentage points for all persons under age 65 in California and 1.5 percentage points in LA • Net result: A significant decline in uninsurance for children, but not adults • All-year uninsurance down 2.5 percentage points for children in California and down 4.7 percentage points in LA • Part-year uninsurance down 1.2 percentage points for children in California and down 1.5 percentage points in LA • In Los Angeles, 291,000 children 0-17 and 1.8 million adults 18-64 were uninsured for all or some of the year in 2003 Source: 2003 California Health Interview Survey

6. Why did job-based coverage fall? • The rising cost of health insurance made it less affordable for employers and workers, and the labor market hit the skids • Cost of health insurance rose, on average, by a third between 2001 and 2003 • But employers increased the average worker share of the premiums by 65% for single-worker coverageand 79% for family coverage • Employers shifted costs to employee and reduced the number of workers eligible for benefits • Family coverage most affected — big part of reason children’s job-based coverage fell more than adults’ Source: 2001 and 2003 California Employer Health Benefits Surveys, Kaiser Family Foundation

7. Why did job-based coverage fall? • California’s unemployment rate • Rose from an annual average of 5.4% in 2001 to 6.8% in 2003 • Reducing the number of Californians with access to job-based insurance and workers’ ability to make wage and benefit demands on employers • Even with economic recovery since 2003 • Job growth has lagged • Most new jobs have been at lower wages and fewer benefits • Many workers have dropped out of labor force • California’s pattern of rising health costs and slack labor markets mirrors national pattern, driving down employment-based coverage across the country Source: California Employment Development Dept.

8. 83% of California uninsured employees do not have access to affordable job-based insurance • Employers not offering health benefits accounts for most of 1.8 million uninsured employees • 63% of uninsured California employees work for employer that does not offer health insurance • Bigger problem among small firms and for low-wage workers • Employer’s eligibility rules are also major barrier, especially among larger firms • 20% of uninsured employees are not eligible for employer plan • Employees not accepting coverage when they’re eligible is smallest problem • 17% of uninsured employees don’t accept offered coverage • Main reason given: “my employer’s plan is unaffordable” Employees Ages 18-64, California Source: 2003 California Health Interview Survey

9. The uninsured are overwhelmingly workers and their family members • Because so many employees do not have access to affordable job-based insurance, most of the uninsured are workers and their family members • 75% of LA’s uninsured for all or part of year are in families with at least one working adult • 59% are full-time employees and their family members • Self-employed workers and their family members • Comprise 11% of uninsured • But they are more likely to be uninsured all year Ages 0-64, Los Angeles Source: 2003 California Health Interview Survey

10. And the uninsured are overwhelmingly low-income adults and children • Among LA adults and children who were uninsured all or part year… • 67% of have family incomes below 200% of federal poverty level — a very low income • Another 14% are in moderate-income families • And 19% are in families with incomes in upper half of state’s income distribution • 4 in 10 of these have incomes between 300% and 400% FPL Ages 0-64, Los Angeles Source: 2003 California Health Interview Survey 2003 Federal Poverty Level was $9,573 for one person, $12,384 for 2-person family, $14,680 for 3-person family, etc.

11. The uninsured are mainly low-income because few low-income workers have job-based insurance • Few poor and low-income LA residents have job-based insurance • California’s job-based coverage rates fell at all income levels between 2001 and 2003 • Medi-Cal protected many poor children, some poor parents, and many poor disabled adults • But 40% of poor LA residents were uninsured all or part year Ages 0-64, Los Angeles Source: 2003 California Health Interview Survey 2003 Federal Poverty Level was $9,573 for one person, $12,384 for 2-person family, $14,680 for 3-person family, etc.

12. ALL ethnic groups lost job-based coverage in California in 2003, compared to 2001 Whites have highest rate of job-based insurance & lowest uninsured rate Latinos have lowest job-based insurance rate and highest uninsured Asian Americans-Pacific Islanders and African Americans in between American Indians statewide also have low job-based insurance rate and high uninsured rate Many people of color also less likely to have job-based insurance Ages 0-64, Los Angeles Source: 2003 California Health Interview Survey

13. Job-based insurance and uninsured rates differ across LA SPAs • Job-based insurance rates vary across LA Service Planning Areas (SPAs) from 30% to 56% of persons under age 65 • Uninsured rates vary two-fold from 17% to 34%, driven by job-based insurance • Medi-Cal and Healthy Families protect many children and some adults who don’t get employment-based insurance Ages 0-64, Los Angeles Source: 2003 California Health Interview Survey

14. We’ve created opportunities for nearly 6 in 10 uninsured children to get public coverage Los Angeles 235,000 California 779,000 • Of children 0-18 who were uninsured at time of CHIS 2003 interview… • 58% in LA County and 55% in California statewide were eligible for Medi-Cal or Healthy Families • 429,000 in California • 135,000 in LA • Another 9,000 in LA and 45,000 statewide were eligible for county programs • 34,000 in LA – 157,000 in Calif – were not eligible due to income limits of the programs • 57,000 in LA – 148,000 in Calif – were not eligible due to immigration restrictions Source: 2003 California Health Interview Survey Children Ages 0-18 Who Were Uninsured at Time of Interview

15. Uninsured adults aren’t so fortunate Los Angeles 1,401,000 California 4,119,000 • Of 4.1 million California adults, including 1.4 million LA adults, who were uninsured at time of interview… • 85,000 in LA and 244,000 statewide were eligible for Medi-Cal • Another 3,000 in California – and none in LA – were eligible for county programs • 874,000 in LA and 2.8 million statewide and were citizens or legal immigrants with green card • 442,000 in LA and 1.1 million statewide were noncitizens without a green card Adults Ages 19-64 Uninsured at Time of Interview Source: 2003 California Health Interview Survey

16. Past and present as prologue? • Employment-based insurance coverage has been on downward slope for over two decades • Several factors contribute to this • Voluntary nature of health insurance, including whether employer offers coverage, employer’s eligibility rules, and share worker must pay • Economic highs and lows affect employers’ actions and workers’ responses • Weak economy accelerates decline, strong economy generates temporary gains • Rapidly rising costs of health care push up health insurance costs • Underwriting cycles sometimes give false hope of stability • Cost increases affect employers’ actions and workers’ responses • Globalization has shifted labor market toward service economy, undercutting economic base of generous benefits • Public programs — Medi-Cal, Healthy Families, and a few county programs —enacted and expanded to cover children and some other vulnerable groups

17. Past and present as prologue? • Patchwork policies and market changes have not altered the trend line • Patchwork programs modestly protect children but fail to address fundamental problems • Managed care expansion slowed health care dollar costs but generated backlash from consumers and health professionals • “Consumer-directed health care” means burdening the sick and the non-affluent • Likely to generate little market enthusiasm and perhaps a lot of backlash

18. Past and present as prologue? • What direction for good policy and good politics? • Universal coverage for children? • 100% Campaign & PICO California proposal, Senate Bill 437 (Escutia) and Assembly Bill 772 (Chan) • Pay-or-play employer mandate? • Daughter of SB 2/Proposition 72? • Individual mandate? • Assemblymembers Keith Richman-Joe Nation proposal • Single-payer? • Senator Sheila Kuehl bill, SB 840 (formerly SB 921)

19. You can get data that you can use in AskCHIS, our free, easy-to-use, online data query system Just go towww.CHIS.ucla.eduand try it!