Governor Brown commits to full Medi-Cal expansion under federal health reform

In his proposed 2013-2014 budget unveiled in Sacramento, Gov. Jerry Brown has committed to a full expansion of Medicaid – called Medi-Cal in California - as part of federal health reform.

Under the expansion, childless Californians adults who earn up to 138 percent of the federal poverty level will qualify for Medi-Cal but will receive slightly less coverage than existing recipients.

The decision comes as a relief to health care consumer advocates who last December expressed dismay that Brown was considering to offer significantly lower benefits to new Medi-Cal recipients under the Affordable Care Act.

By Jan. 1, 2014, the full Medi-Cal expansion is expected to add up to 1.5 million newly eligible adults to the state's health care program for low-income Californians. But, state officials said, it’s not clear just yet how that expansion will take place.

Under the governor’s proposed budget there are two alternative ways Californians might expand Medi-Cal coverage, said Diana Dooley, California's Secretary of Health and Human Services.

Dooley told reporters at a news conference Thursday that one way would be through a state expansion of the existing Medi-Cal program. That option, she said, would require a swap: The state would pay for services that counties had traditionally paid for; in exchange, counties would shoulder some social services the state now covers.

In the alternative, Dooley said, California could offer Medi-Cal coverage to newly eligible adults through the county-run Low Income Health Program (LIHP) that 55 out of 58 counties either offer or are now building.  

The optional county-federal partnership programs were established in a 2010 agreement between California and the federal government to help the state create a  bridge to federal health reform and to keep down health costs within the Medi-Cal program.

So far, about 550,ooo Californians are enrolled in an LIHP.

Dooley acknowledged that if California adopts the LIHP model, each county would likely be required to conform to standardized federal rules, including certain income eligibility requirements. Right now, variations in eligibility and other rules exist within the plans that are due to expire this year. Dooley said this option would also require “guidance” from the federal government as the program was intended as temporary bridge until 2014.

“There are risks and complications in both approaches and we will work together with our county and legislative partners to find a path that does the greatest good for the greatest number in meeting the goal of expanding Medi-Cal,” Dooley told reporters. 

Dooley also said Medi-Cal would not provide long-term care benefits to the newly eligible adults that are now provided to its nearly eight million existing recipients.
           
Upon release of the budget, health care advocates applauded the governor’s decision to opt for full MediCal expansion, but urged caution.

“The budget seeks to give counties the responsibility for the Medicaid expansion, but with any proposal, we want to ensure there are the resources and funds for public hospitals and other safety-net health providers that we still be needed,” says Anthony Wright, executive director Health Access, a statewide health care consumer advocacy organization said in a written statement issued to the press. “Even if we are successful in reducing the number of uninsured by two-thirds, California will still have several million uninsured, and all of us will need a safety-net that survives and thrives.”

Under the Affordable Care Act, the federal government will pay for 100 percent of the cost increase for the Medi-Cal expansion through 2016.  After that, the federal government will drop its support to 90 percent, which the Kaiser Family Foundation estimates could cost California more than six billion dollars over ten years time.