ACA health insurance will cost the average person 75% more next year

Does residency fraud exist? I'm sure of it. Despite the UC and CSU systems not publishing residency fraud statistics, such fraud is universally described as being extremely difficult to execute. I cannot overstate this point. Students routinely depict residency fraud as being more difficult to do than simply paying out of state tuition. The high cost of committing residency fraud makes cancels out any expected payoff. Furthermore, most instances of detected fraud appear to be technical and clerical errors, not intentional deception.

What are in-state residency requirements, and how difficult is the requirement? Evidence for residency includes:

- Obtaining a California driver’s license or ID card

- California vehicle registration

- California voter registration

- California state tax returns

- California bank accounts

- Employment in California

- Lease, mortgage, or property ownership in California

- Severing residential ties to your former state (e.g., closing out-of-state bank accounts, surrendering non-CA licenses)

Additionally, one year and one day of residency is commonly the required threshold to qualify for in-state tuition.

The question becomes, is this effective enough at reducing fraud rather than can fraud be eliminated. I'm sure, like with any system, fraud detection and remediation are part of the operating costs and measured in terms of recovery rate/rate of return - the KPI we're discussing.

People genuinely moving to California would presumably pay out of state healthcare fees until their residency was established. Don't you agree that these fees could be set in a way that served as a barrier to doing what you suggest?

Is there a case that isn't covered by this that you're thinking about?

1. Cal. Code Regs. Tit. 5, § 54022 - Physical Presence. "Physical presence within the state solely for educational purposes does not constitute establishing California residence regardless of the length of that presence." https://www.law.cornell.edu/regulations/california/5-CCR-540...

Sick people are allowed to like California's weather enough to move there. The ADA would also apply when trying to restrict residency in a way it would not for education.

Perfectly fine. They shall pay out of state rates until they meet the threshold.

> The ADA would also apply when trying to restrict residency in a way it would not for education.

Can you elaborate? In the best case, it's difficult to predict how courts would rule on this. Any relevant case law? Legislation?

I'm not arguing they'll move and obtain residency on day one. I'm arguing it may still make sense to move, pay out of pocket for the 366 days, and gain residency for some folks.

The ADA's Title II would seem to forbid "you can't be a resident, ever, if you've got expensive healthcare costs" sort of rules at the state level, yes? That would clearly not be equal treatment for people with medical disabilities.

It's trivial to construct a threshold and out of state pay structure which cancels this case out. What number of days and out of state pay structure do you feel would cover these cases? How many of these cases do you suspect will occur annually and what is the projected cost? It's a relatively easy problem to solve once we get down to the specifics.

> "you can't be a resident, ever, if you've got expensive healthcare costs"

Great! I'm not arguing for "ever". I think we're in the clear here.

Edit: Let's estimate the volume of this effect using migration after Medicad expansion as a proxy. Over 10 years (2009 to 2019) we find 56,659 interstate moves after Medicaid enrollment growth[1]. In other words, 0.23 percentage points greater annual population growth in the target population. Another study found an in-migration rate(to CA) of 1.4% for medicaid recipients. Being generous and taking the higher of the two, and multiplying it by California's net immigration of 500,000–600,000 annually, gives us an estimated 7000-8400 medicaid migrants a year a fraction of which are migrating primarily for medical purposes. What would you estimate the annual medical expenditures for this group would be and if an "new arrivals" insurance pool was formed, what would the marginal monthly premium cost be to its members?

I estimate that a CA new arrivals insurance pool would have $4B in annual disbursements, and $4-20M in annual residency fraud. Using averages, we can estimate a monthly premium for this group would be about $667/month.

This is roughly on par with unsubsidized ACA premiums for adults in many states. For comparison, ACA benchmark premiums for a 40-year-old in California in 2024 are about $450–$600/month.

1. https://pubmed.ncbi.nlm.nih.gov/39893838/

2. https://pmc.ncbi.nlm.nih.gov/articles/PMC4011649/?