The California health insurance landscape ended 2019 essentially unchanged from the previous year, with 32.7 million people enrolled, according to newly released data from the state Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI). A strong pre-coronavirus economy generally boosted employer-sponsored enrollment, while enrollment in the individual private insurance market and in Medi-Cal managed care plans continued the declines that occurred in 2018.
California enrollment data and a quick reference guide are available on the California Health Insurance Enrollment Almanac page.
Employment-Based Enrollment Increases
Both jobs and employer-sponsored insurance (ESI) enrollment increased in 2019. While jobs grew by 1% (183,000), ESI enrollment expanded by 1.3% (232,000) to reach 18 million. ESI, which consists of small group, large group, and administrative services only (ASO) enrollment, increased in 2019. Small group enrollment grew 0.7% to 2.3 million, large group enrollment increased 1.2% to 10.1 million, and ASO arrangements — in which the back office and provider network functions of a self-insured employer are performed by an external company that does not bear financial risk for paying out claims — expanded 1.7% to 5.6 million enrollees.
Medi-Cal Managed Care Enrollment Declines as Medicare’s Grows
Public managed care enrollment declined by 1.2% in 2019, driven by reductions in Medi-Cal managed care membership. Medi-Cal managed care plan membership fell by 2.9% (302,000) following a 3.5% decline in 2018. Several factors likely contributed to that trend, including an improved economy in which enrollees shifted to job-based coverage, a rising minimum wage that made some people ineligible for Medi-Cal, and federal immigration policies that have discouraged enrollment in public benefit programs. In contrast to Medi-Cal managed care enrollment decreases, Medicare managed care enrollment grew by 5.9% (149,000) as more members of the huge post–World War II baby boom generation aged into eligibility for the program.
Individual Market Downturn Persists
At the end of 2019, the individual market had 2 million enrollees, down 5.4% (115,000) from a year earlier, in a fourth consecutive year of declines. Possible factors related to the decline include Californians transitioning to ESI, dropping coverage they couldn’t afford, aging into Medicare eligibility, or going without insurance after Congress repealed the federal insurance mandate.
Both components of the individual market contributed to its 2019 drop: an 8.4% (70,000) decline in non–Covered California and a 3.6% decline (46,000) in Covered California enrollment. In contrast, the 2018 individual market decline was due solely to reductions in enrollment outside Covered California. Covered California’s 2019 decline occurred in subsidized enrollment.
Changes in new enrollments contributed to the dynamics of the 2019 individual market enrollment. New enrollment in Covered California, for example, fell 24% (92,000) from the previous year, probably a result of the elimination of the federal tax penalty for failure to obtain health insurance coverage. New enrollments are especially important to Covered California because an estimated 37,000 Covered California customers turn 65 each year and age into Medicare coverage.
New state policies such as an insurance coverage mandate penalty and expanded premium subsidies for Covered California customers with middle incomes (PDF) could reverse individual market declines in 2020.
New Data: MEWA, Enrollment in and out of Covered California
State lawmakers last year passed SB 129, requiring regulators to start reporting enrollment figures for multi-employer welfare associations (MEWAs) and the breakdown of individual and small group markets, by insurer, into Covered California and non–Covered California enrollment, also known as “on and off exchange.”
MEWA enrollment totaled 262,598, or 1.3% of all commercial and ASO enrollment.
The “Covered California / Non–Covered California” enrollment report showed that 19% of the small group market was enrolled through Covered California for Small Business, where qualifying employers can access federal tax credits to lower the cost of coverage. In the individual market, 63% were enrolled through Covered California, where enrollees with incomes between 138% and 400% of the federal poverty level were eligible for government premium subsidies in 2019.
Enrollment by California Regulator
Changes in the distribution of enrollees by regulator were minimal in 2019. Some 95% of enrollees in commercial and public managed care were covered by plans regulated by DMHC, while 86% of ASO enrollees were served by companies under CDI regulation.
Looking Ahead
The 2019 enrollment figures are a baseline for measuring the impact of events occurring in 2020. These include state-sponsored premium subsidies for buyers of health plans on the individual market, the state penalty for failing to get health insurance coverage, Covered California’s special enrollment period in response to COVID-19, and pandemic-related job losses that have left Californians without health insurance.
Authors & Contributors
Katherine Wilson
Katherine Wilson is an independent consultant specializing in health insurance markets and health care costs. She is the author of numerous publications and reports, including CHCF’s series of reports on California health insurers.
