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Medi-Cal expansion mired in money fight

California Governor Jerry Brown will release his revised state budget Tuesday morning, which will likely have ramifications for the expansion of Medi-Cal.
California Governor Jerry Brown will release his revised state budget Tuesday morning, which will likely have ramifications for the expansion of Medi-Cal.
Kevork Djansezian/Getty Images

When Governor Jerry Brown unveils his revised state budget Tuesday morning, healthcare advocates will be looking for a more detailed Medi-Cal expansion plan. 

The Governor has committed to extend the healthcare coverage for low-income families to one million more residents, as part of federal healthcare reform, but he’s yet to produce a detailed plan.

Brown has said California needs to find a “sustainable” way to expand Medi-Cal, “so we don’t find ourselves in a big hole in a couple of years.”

The federal government will pay all the costs to expand Medi-Cal for the first three years, but that only includes residents who will be newly-eligible.

Hundreds of thousands of Californians who are currently eligible but haven’t signed up for the program, or have fallen off the roles temporarily,  are expected to join when the state eases eligibility rules and simplifies enrollment.  

The Brown Administration estimates that adding them could cost the state $700 million more a year to run the program once fully implemented.  After three years, the state would also have to pick up ten percent of the cost of caring for the newly eligible, single, childless adults earning up to $14,500 a year.

The Administration wants counties to help hedge the risk by, in essence, giving up some of the $2 billion in state funds they get every year for public health.  

“Sounds like a reasonable simplification…not so much,”  said Assemblywoman Holly Mitchell (D-LA), who, like most Democrats in the legislature, opposed the idea.

While counties are expected to save hundreds of millions of dollars when Medi-Cal expands, that doesn’t erase their costs for indigent care. 

Southern California’s vast undocumented population won’t be eligible for the program.  Because no one can be denied treatment at county facilities, Mitchell said redirecting the funds would leave those patients with insufficient care.

“We’re talking about significant segments of our community being left behind and that’s unacceptable to me,” she said.

LA County’s Department of Health Services estimates it will see 229,000 patients gain Medi-Cal coverage. Director Mitchell Katz says that's a minority of the people who use county services currently paid for by the state.   

“There will still be over a million uninsured people in Los Angeles,” Katz said. “We need realignment dollars so that we can continue to provide care to those that are either excluded from the coverage initiative or unable to pay for it.”

At AltaMed, a large network of private community clinics serving Los Angeles and Orange County, Chief Medical Officer Dr. Martin Serota expects half of the uninsured patients they treat to remain uninsured when the state expands Medi-Cal. 

Those left will be mostly undocumented immigrants, Serota said, but he also expects to see an influx of people who just don’t want to pay for healthcare insurance — despite the new federal mandate to have coverage.

“There may be a lot of middle-class patients with good incomes — who are low risk — and decide they’ll just play the odds,” Serota predicted.  But, he said, as frequently happens, those odds will turn out worse than people think: “If they get ill, they choose to access care through emergency rooms.  And it may be on somebody else’s dollar.”

Farrah McDaid-Ting with the California State Association of Counties said it’s impossible to predict how healthcare costs will change in a place as complex as Los Angeles.  The group’s been negotiating with the Brown administration since January to keep state funds for public health with the counties — at least for the first three years of Medi-Cal expansion.

“We really have to know what counties are going to be left with,” McDaid-Ting said.  “Since the federal government is paying for [Medi-Cal] for three years, it gives us some time to develop data.”

McDade described talks with Administration officials as “cordial, ” but “mired.” Healthcare advocates, frustrated by the impasse, tried to spark some movement last week with a plan to let counties to keep the public health dollars, but require them to justify how they spend the money.

They maintain California needs to start enrolling people in Medi-Cal by October to get them covered by January when federal healthcare reform takes effect.

“We would like to see the administration be more ambitious in terms of their enrollment goals,”  said Elizabeth Landsberg with the Western Center on Law and Poverty. 

Landsberg wants people to get coverage as soon as possible, but said there's also a financial benefit to the state: “For people who haven’t had coverage for a couple of years, let’s face it, they’re going to go to the doctor more in their first year.”

Landsberg and other healthcare advocates hoped to see new details in the Governor’s revised budget that could hasten Medi-Cal expansion.