California Is Reviewing Medi-Cal Eligibility For Millions Of Recipients. What Happens If You No Longer Qualify?

Ads and infographics are popping up on social media, television and radio targeting more than 15.8 million Californians enrolled in Medi-Cal, the health insurance program for low-income residents. The ads urge them to update their health information and look for a bright yellow envelope in the mail.

It’s part of an effort to transition an estimated 2 to 3 million Californians who no longer qualify for Medi-Cal, the state’s version of the Medicaid health insurance program, to market health insurance policies through Covered California, the state’s health insurance marketplace.

The bright yellow envelope will be sent from the agency that administers Medi-Cal in your county about six weeks before the start of the next renewal month. It will contain paperwork telling enrollees if they are still eligible for the safety-net health insurance program or asking for more information about income and employment status.

States reexamine Medicaid eligibility annually, but agreed to pause the practice during the pandemic in exchange for extra federal funding unless an enrollee moved out of state or committed fraud. The Medicaid continuous enrollment provision ended on March 31, 2023, so states, including California, are reassessing if people still qualify.

Covered California will reach out to people who are no longer eligible for Medi-Cal directly through email, direct mail, and text messaging. People may lose eligibility because they make too much money to qualify for Medi-Cal, which for an individual is just over $20,000. Others may be dropped for procedural reasons, such as failing to respond to requests for updated personal information, according to federal estimates.

“We are sending letters to anyone we have identified who might need a new source of coverage, and then we are using the information that we have to tell them whether we believe they are eligible for financial assistance,” said Jessica Altman, director of Covered California.

Under a state law, people who no longer qualify for Medi-Cal but still have a low enough income to qualify for an insurance subsidy through Covered California will be auto-enrolled in a plan the exchange deems the best coverage for the lowest cost. People will have a month to accept the plan or chose another.

“There will be people who are eligible for financial assistance and there will also be people for a variety of reasons who we think may not be eligible for financial assistance, but it's really important that these individuals go through the process, share all their information so that we can be certain about that determination,” she said.

Based on pre-pandemic trends, nearly half of the consumers who transition from Medi-Cal to Covered California will be able to get quality coverage at little to no cost, Altman said.

“Right now, 90% of Covered California’s 1.7 million enrollees receive financial help, with many people paying $10 or less per month for their health insurance,” she said.