Option C — Error: may / Correction: have
The sentence requires parallel structure: "has improved… but health outcomes have not" (ellipsis of 'improved'). "May not" breaks the parallelism.
The sentence contrasts two ideas: health coverage has improved, but health outcomes have not (improved — implied). The auxiliary verb must match the tense and structure of the first clause for grammatical parallelism. "May not" introduces uncertainty/modality, which is incorrect here; "have not" correctly completes the parallel structure with the omitted main verb improved.