Weighing The Pros And Cons Of Expanding Medi-Cal
January 9, 2013 1:45 p.m.
Dylan Roby, Assistant Professor of Health Policy & Management at UCLA, co-author of a report on how an expansion of the state's Medi-Cal program would affect health coverage in California and at what cost.
Gary Rotto, Director of Health Policy, Council of Community Clinics San Diego
Jorge Riquelme, Executive Director, Bayside Community Center in Linda Vista
Related Story: Weighing The Pros And Cons Of Expanding Medi-Cal
CAVANAUGH: Lawmakers assembled in Sacramento this week expecting the governor to call a special session on healthcare issues. So far that hasn't happened, and lawmakers are waiting for the release of the governor's budget tomorrow to see what provisions are being made for new healthcare programs. One of the major change this is week is the transition of California's Healthy Families program into an expansion of Medi-Cal. Critics fear huge costs for the state and a lapse in medical assistance. Dylan Roby, coauthor of a report on how expansion of the state's Medi-Cal program would affect health coverage in California and at what cost. Welcome to the program.
ROBY: Thanks, Maureen.
CAVANAUGH: Gary Rotto is here, director of health policy in the council of community clinics in San Diego.
CAVANAUGH: And Jorge Riquelme, welcome to the program,
RIQUELME: Thank you, Maureen.
CAVANAUGH: Why is the Medi-Cal program expanding in the first place?
ROBY: Well, it all starts with the Affordable Care Act started in 2010. It's popular known as Obamacare, of course. And part of the underpinning of the law is to create better access to health insurance. And one of the ways that was done for low-income individuals was to expand existing state Medicaid programs. So rather it being for very low income, disabled child populations and their parents, it would then be expanded to people earning up to 138% of federal poverty level which is about $15,000 a year for a single person, $32,000 for a family of four, for all childless adults as well as the parent who is are above the income criteria. This is a state program, and the Supreme Court decided that the federal government doesn't have the power to require states to do this. So California is currently deciding whether to abide by the Affordable Care Act or exercise their option to opt out and leave this program where it is today without covering this new population.
CAVANAUGH: Right. And I just want to explain for our listeners, in California, the Medicaid program -- we call it Medi-Cal. The Medi-Cal program expanding, that means that the qualifications to apply for Medi-Cal have increased. The amount of money you earn to be eligible to be enrolled in Medi-Cal has gone up.
ROBY: Yes, partially. Medi-Cal has two aspects. One is what's called categorical eligibility, which is if you're a disabled or child or parent, you can qualify under income guidelines. Unfortunately that means if you're a single adult, even if you make no income you can't qualify at all. So this allows them to expand it based on income only and allow anybody to come in who is a documented immigrant, who's been living here for more than five years or is a citizen. So exclude expand eligibility to a whole new class of people in California, probably around 1-1/2 million people<.>
CAVANAUGH: I see. Now, there are several states that have opted out of this part of the Affordable Care Act. They don't want to expand Medicaid in your state. From your retch is that likely to be a bad idea for the states?
ROBY: I think it depends on the state climate. There are 10 states that have decided not to expand Medicaid, probably related to more political purposes than a funding issue. One of the key parts of the Affordable Care Act is that the Medicaid expansion is completely funded by the federal government for the first three year, then it decreases down to 90% federal funding in 2020 and beyond. In contrast, current Medicaid programs especially in California are funded at $0.50 on the dollar from federal dollars. So 50% coming from the state, 50% coming from the federal government. In the expansion, if a state complies, 100% of the money would be federal for the first three years and down to 90% for the following years. So it does make sense for a state with high uninsured rates who are low-income to move them into a medicate program where it would mostly be a federal budget impact.
CAVANAUGH: Gary, can you tell us what the healthy families program is and how is differs from Medi-Cal?
ROTTO: It's a subsidized program so that folks, kids that were above that income level of Medi-Cal would receive some coverage and there would be premiums paid by the families. And traditionally, there have been another set of doctors, physicians that may not have accepted Medi-Cal but were willing to accept healthy families because it paid more and the benefits to the families were more extensive.
CAVANAUGH: How important would you say the healthy families program has been for San Diego?
ROTTO: Well, it's been very successful. Certainly, especially as families are -- have been moving up on the income scale, more successful as the economy has been better, but may not have been able to afford for their families to be able to afford healthcare have been offered full healthcare coverage. They have been able to buy N. I coached soccer for a number of years, and one of my other parents that was participating with me, he had his own business. And there were times when he because of income couldn't afford to insure all three kids. But because of the healthy families program was able to do that. And they had coverage throughout the year.
CAVANAUGH: Jorge, since the qualifications for Medi-Cal are now going to be expanding and more people are going to be brought into this program, some of which couldn't qualify for Medi-Cal before will be able to, are the healthy families program is being phased out. Are there concerns about healthy families being phased out?
RIQUELME: Definitely. That's not a lot of clarity at least at community level of how this will impact each family. Some of the members who are currently enrolled in healthy families worry about the excessive bureaucracy involved in enrollment. Some families opted out of Medi-Cal because the process of enrollment with healthy families was significantly simpler. So that is an issue that will be raised as we transition this year as a community-based organization. We're there trying to help the families figure out this process, to make sure that they don't get dropped off the system.
CAVANAUGH: Right. There was some concern, the president of the state Senate was concerned that there might be some people who are left sort of high and dry during this transition because they won't be able to see their doctor or -- Gary?
ROTTO: One of the things that I think the president pro tem Steinberg has talked about is continuity of care. You've got to make sure that anytime you transition a program, especially in somebody is in a care program, let's say being treated for cancer, you want to make sure that they can continue to see their specialist, their primary doctors, so if you transition from one program to the other, there isn't that gap so they can't continue their course of care that's so urgent to people to maintain their situation or even improve their health status.
CAVANAUGH: Taking that into consideration, researchers at the UCLA center for healthy policy that you're attached to, you joined up with the UC Berkeley center for labor research and education, and you did this analysis any how costly this expansion of Medi-Cal would be in California. The report describes those costs as minimal. You just told us that the bulk of the cost of the expansion are going to be taken up by the federal government. Why has this been characterized do you think as such a major expense for California?
ROBY: I'm not sure if it's been characterized as a major expense. I think the governor has made some statements that he's concerned that the federal government could change the way they do the federal matching equations, and they could as a result of the fiscal cliff debates or future debates about avoiding the sequester cuts in the federal budget could pull the rug out from under states if they wanted to or had to due to political purposes. There's always concern that if you're creating a brand-new program or expanding a program that's reliant on federal dollars, and two years in the federal government decides to pull back the funding and it now becomes a burden of the state, that's always the problem of the governor and the legislature to come up with that money. In the current context though, it seems if California does move ahead in a special session to expand Medicaid starting in 2014 as expected, then they would be spending about $433 million a yearon the new medical population by 2019 in contrast to about $3.5 million coming from the federal government to subsidyize that population. And we've been putting these kind of episodic pieces of indigent care together over the years, and this is a way to move to a more consistent insurance product.
CAVANAUGH: We got a statement from Senator Joel Anderson, a Republican from San Diego, and he's vice chair of the Senate health committee. He sent us a statement which characterizes the elimination of healthy family this is way. "The state is losing one of the most successful state programs and is now moving those kids into one of the most inefficient and broken programs in California, Medi-Cal." Jorge, let me get you to respond to that. Do you see that as a true situation? Or is that something that you see on the ground that Medi-Cal doesn't work?
RIQUELME: Well, we've seen families that had enrolled and have proof of being enrolled, and they have been notified that they were not enrolled. So there definitely needs to be close monitoring of the implementation because there have been problems. People who are eligible not being enrolled and other difficulties. So I wouldn't go to the extreme to say that it's going to -- that it's so catastrophic as it's been portrayed by this legislature. But certainly it's something that we need to monitor closely, particularly if we want to benefit the low-income diversity population. When we have a lot of language barriers involved, and that's also a great concern to us.
CAVANAUGH: One thing too that perhaps is an unintended consequence of this expansion of Medi-Cal and the elimination of the healthy families program, that is undocumented children who are now covered by healthy families will not be covered by the Medi-Cal expansion. ; is that right?
RIQUELME: Undocumented children are not covered by healthy families.
CAVANAUGH: Oh, I didn't know that. Okay.
RIQUELME: They're not.
CAVANAUGH: So there is no transaction there.
RIQUELME: That's right. In that sense, there is not.
ROTTO: Usually the contrast that's made by lather legislatures between healthy families and Medi-Cal, it boils down to funding. Healthy families has paid a larger reimbursement rate to the physician, whether it's been primary care or specialty care. So far the network tends to be a little more robust. Whereas Medi-Cal, there's always been the discussion about cutting it. Will so that you have fewer specialty care docs in particular that are part of Medi-Cal. So that's part of the problem here. There will be doctors that take healthy families, may want to still see the kids but refuse to take Medi-Cal because the reimbursement rate is so low.
CAVANAUGH: And also, Gary, does that explain the criticism that I've read that the Medi-Cal program is not up to speed to be able to make this transition, that there aren't enough healthcare providers to handle the influx of new Medi-Cal recipients?
ROTTO: That's what we look at, the specialty care. Because we believe for the clinic association, we believe we're ready, that we have the docs in place, the physician,ed providers, that we enter the care teams. We've been working on PCMH, the patient care medical home to expand and really focus on the patient. Buff the program will be on the specialty care. If we don't have certain specialists on staff in certainly clinics, how do we go out and refer? Are there people that are willing to take Medi-Cal? Primary care, we think it's going to be great. Specialty care, we're concerned and will still continue to work with the legislator to improve the network.
CAVANAUGH: What kind of job has the state done in trying to get the information out to the people that you serve and to even healthcare providers about how this transition is going to take place?
RIQUELME: Well, I'm very supportive of the new changes taking place. But I see a major deficiency. All of the policies do not come accompanied by investment at a community level. So we're left having to figure out how we're going to address issues of the limited English proficient population, how do we meet the needs of those populations? Thinking not only of children but of seniors. The legislation is aiming at reducing readmissions of hospital rates. Which controls are we going to have to make sure hospitals turn away populations that put them at risk of getting fined by the new legislation? So the urgency here is to address how communities are prepared to embrace this new change and have the adequate resources to be able to enroll the population.
CAVANAUGH: And as a side note, it's my understanding that the healthy families program is no longer taking applications and that the transition in San Diego from healthy families to Medi-Cal is actually supposed to happen this March; is that right?
ROTTO: Yes, it's ongoing now. There are notices that have been sent out to the families that are enrolled in healthy families. San Diego is part of that first wave, that first phase of transition.
CAVANAUGH: Now, even though the governor is moving forward with this expansion of Medi-Cal, are the state legislature has yet to formally approve it. So I'm wondering, some of the concerns that you're hearing here from healthcare providers who deal with family clinics and so forth, do you think that's going to be hammered out by state legislators before this program gets the official seal of approval?
ROBY: I want to make sure we're not conflating the healthy families transition with the Medi-Cal expansion. The healthy families transition was authorized in the last budget cycle and is taking effect January 1, 2013, and on. And that was a concession made by the legislator to allow the government to do that to save money because the Medi-Cal rates are lower than the healthy families rate. So even though the same kids will still be insured, they'll be insured through a different mechanism. The governor has an interest in supporting Medi-Cal, but he doesn't want California left with a bunch of state spending that's not reenforced by the federal government. It's not that he's necessarily fighting with the legislature to get them to agree to expand Medi-Cal. The legislature is very pro-expansion of Medi-Cal, and Senator Hernandez has already introduced the bill to do so. The governor has indicated to the federal government that would like to see more flexibility to cap visits, to change payment, to change benefits if needed so that there's some state ability to be flexible in delivering Medi-Cal versus the federal inflexibility that the administration may view is occurring. So the governor, even though he's generally supportive of Medi-Cal expansion and prior to last month his administration was coming out with messages around planning for Medi-Cal expansion, really right now I see it as the governor is holding fast on making sure that the Medi-Cal expansion is done in a way that's not going to risk the state budget, and he's playing the kind of conservative side. But he's also bringing these issues up with the federal government to try to say if we're going to do that, we need assurances that we're not going to get cut later on and have some flexibility in delivering care and the benefits.
CAVANAUGH: And just to try to be crystal clear in this very, very complicated subject, this may not be the Medi-Cal expansion, but it is a Medi-Cal expansion with the healthy families program being transferred, people in that program being transferred into the Medi-Cal program. Thank you so much.