Brown, Democrats wrangle over Medicaid expansion
SACRAMENTO, Calif. (AP) — California was an early booster of President Barack Obama’s health care reform law and was the first state to authorize a health insurance exchange in 2010. It also was quick to commit to the optional Medicaid expansion that has been rejected by some Republican states.
Turns out, saying yes was the easy part.
It’s been months since Gov. Jerry Brown agreed to expand Medi-Cal, as Medicaid is known in the state, to some 1.4 million Californians, but he and his Democratic colleagues in the Legislature are still wrangling over details of the expansion.
Democrats, who control the Assembly and Senate, disagree with Brown over the Medi-Cal enrollment and implementation process. Meanwhile, the governor is pushing for budget savings by reducing county support for indigent care.
He and the Democratic leaders remain apart over terms of the legislation seeking to expand Medi-Cal up to 138 percent of the federal poverty level, or nearly $15,860 for an individual. Democratic lawmakers and health advocates fear that even a short delay will cost California hundreds of millions of dollars in federal support.
“California needs to expand Medi-Cal fully and urgently in order for us to be ready for open enrollment in five months,” said Anthony Wright, executive director of Health Access California, a group that lobbies for health care for the poor. “There’s not a lot of time, and there are decisions we still need to make that then influence what counties do, what community groups do. People have to be trained.”
The health insurance exchange begins enrolling customers on Oct. 1, and the state wants to sign up uninsured Californians whether they qualify for a public program such as Medi-Cal or will have to buy private coverage. In most cases, those buying their own insurance will receive tax credits to make premiums more affordable.
The state has to be ready to direct people to the right place, whether it’s to their county health services department or the state’s new insurance marketplace, Covered California.
While lawmakers have passed regulations for private insurance, they have yet to agree with the governor on the Medicaid portion because Brown is particularly wary of the potential costs that could affect state spending for years to come.
“We want to implement this and we still believe there’s time to be successful and to implement the optional expansion, but we need to do it and recognize that it needs to be done in a way that is affordable and sustainable given that the governor has worked to make sure that we have our fiscal house in balance over the long haul,” said Toby Douglas, director of the California Department of Health Care Services, which runs Medi-Cal.
Under the expansion, more than 1.4 million California adults under age 65 will be newly eligible for Medi-Cal. Of those, between 750,000 and 910,000 are expected to enroll by 2019, according to a joint study by the University of California, Berkeley’s Center for Labor Research and Education and the UCLA Center for Health Policy Research.
Another 240,000 to 510,000 Californians who are eligible but not enrolled in Medi-Cal are projected sign up by that time. Overall, the study estimated that 5.8 million Californians will be uninsured in 2019 without the Affordable Care Act.
The federal government will pay 100 percent of the costs for newly eligible Medi-Cal recipients from 2014 to 2016, gradually phasing down to a 90 percent share.
Despite those generous matches, the state will still bear some of the costs. According to researchers at the UC Berkeley’s Center for Labor Research and Education, California will spend between $46 million and $75 million in 2014 on these enrollees, with costs growing to between $309 million and $381 million in 2019.
Health care advocate Adrian Sanchez is waiting for the day when his 52-year-old mother, Ana Sanchez, doesn’t have to decide between paying rent and treatments for chronic lupus.
Ana Sanchez is s a widow who has worked for more than 20 years at a mushroom-packaging center in the Salinas Valley. She makes about $15,000 a year — too much to qualify her for the state’s Medi-Cal program and too little to buy private health insurance.
“It makes me feel a little anxious just because I know there are real people that I can identify that are really waiting for this to happen,” said her son, who now lives in Oakland and works for the Greenlining Institute, an advocacy group for minorities and low-income people.
Democratic lawmakers view a delay as a lost opportunity to promote the expansion and get them enrolled using federal dollars.
State Assemblyman Richard Pan, D-Sacramento, who chairs the Assembly Health Committee, estimated the state could lose $175 million to $200 million from the federal government’s 100 percent match each month the Medi-Cal expansion is not in place next year.
“Could we do it later? Yes, but there’s so many advantages of getting it done in a timely manner,” said Pan, a pediatrician.
The Brown administration wants to be able to get out of covering this expanded population if the federal government ever lowers its 90 percent Medicaid match. Advocates say that has not happened in Medicaid’s four decades of existence and noted that the federal government increased reimbursement rates during the Great Recession.
Democratic lawmakers, meanwhile, want the state to accept an applicant’s self-reported income and assets, but the administration wants to adopt a verification process that takes longer.
The governor also wants to reduce state funding by as much as $1.5 billion for counties, which currently provide indigent care through public hospitals and clinics. Counties argue they still need that money to maintain their safety-net systems and provide public health services.
“Even after implementation of federal reform, 3 to 4 million people will remain uninsured, and counties will still be the last resort for health care,” Matt Cate, executive director of the California State Association of Counties, said in a statement.
To make matters more complex, the state still has to figure out how to help individuals with incomes between $15,000 and $22,000. People in this group are most at risk of being unable to afford coverage. Even with federal subsidies, they still will have monthly premiums and co-pays.
The next few weeks will be pivotal for California, said Marian Mulkey, director of health reform and public programs at the California HealthCare Foundation, an Oakland-based nonprofit health policy research organization.
“If in fact we drag on into June and mid-summer … and we don’t know what’s going on by that time, then yes, the prospects for smooth and wide enrollment are much diminished,” she said.
The governor is expected to update his health care plans in a revised budget to be released in the next few weeks.