How the ACA’s Medi-Cal expansion will work

August 26, 2013

By Daniel Weintraub

The federal health reform known as the Affordable Care Act has so many moving parts that it is almost impossible to predict with confidence how it all will work once the law inches closer to full implementation on Jan. 1.

But one very big piece of the Act is almost certain to roll out as intended: the expansion of the Medi-Cal program to accommodate more than a million low-income Californians who until recently had almost no access to the doctors, hospitals and labs that many people take for granted.

One reason we know that this historic expansion of the program can succeed is that much of it has already been accomplished in another form, as part of something known as the “Bridge to Reform.”

That program, funded by the federal government and managed by California’s counties, expanded access to care for more than 700,000 people in advance of the implementation of much of the rest of the new health law.

The new recipients were mostly childless adults who despite having very low incomes did not qualify for Medi-Cal. But on Jan. 1 they and others like them will be folded into Medi-Cal, bringing the program’s rolls to more than 9 million statewide, or nearly one in every four Californians.

The expansion will be paid for largely by federal taxpayers. The federal government will pay 100 percent of the cost of the care in the first three years, then roll that back to 90 percent by 2020. Administrative costs will be split roughly 50-50 between the state and the federal government. All in all, Californians are expected to be getting about $6 billion worth of additional care annually by 2020, at a cost to the state of about $600 million a year.

In Orange County, 80,000 to 100,000 people will be newly eligible for Medi-Cal on Jan. 1, adding significantly to the current total of about 440,000 people on Medi-Cal in the county. But about half of the newcomers – around 45,000 people – are already being covered under the Bridge to Reform, known as Medical Services to Indigents in Orange County. That program brought consistent care to a population that in the past depended largely on hospital emergency rooms to treat their ailments.

“We have a relatively large low-income health plan already in operation in this county,” said Mike Ruane, chief of strategy and public affairs for Cal-Optima, the public health agency that manages Medi-Cal benefits in Orange County.

Despite the head-start, though, there will still be challenges.

The biggest hurdle might be finding enough doctors to care for all the people who will be newly eligible for benefits. Medi-Cal has some of the lowest costs per patient of among the major industrial states’ subsidized health plans, and it accomplishes that by paying doctors relatively little. But the result is that many physicians cannot or will not see Medi-Cal patients.

To help solve that problem, the federal government agreed as part of the Affordable Care Act to provide funds to increase reimbursement rates for Medicaid (which serves the poor) to the same levels now paid for Medicare (which serves the elderly and people with disabilities). But that extra reimbursement will last only two years, through 2015, and California has not yet decided how much more it will pay doctors who take Medi-Cal patients.

Another potential problem: the people who will be newly eligible for Medi-Cal are expected to be sicker, on average, than those already in the program. Why? Because most of the people in the program now are single mothers with children, and they tend to be a relatively healthy population. Many of the newly eligible people, though, will be single men living in poverty, many of whom are homeless or nearly so, and have mental illness or drug and alcohol addictions.

“It’s a very different group,” Ruane said. “They will require a high level of care coordination and they will have higher levels of utilization.”

The community clinics that serve a lot of Medi-Cal patients through Cal-Optima have been preparing for the expansion for more than a year. One thing they will be doing is changing the way they manage people’s care. They will be offering more of a wraparound service rather than depending on the client to keep track of all the services they need.

The Alta-Med network of clinics, for example, will have health educators to help patients plan their care with their doctor, and referral coordinators to help them make appointments with specialists. Others will help patients when they leave the hospital to make sure they have what they need at home to stay healthy, and pharmacists on staff will meet with patients to help them make sense of multiple prescriptions.

“The goal is to help our patients stay out of the hospital and make sure they are taking care of themselves as well as possible, wit the help of their provider,” said Mildred Pena, who helps manage the Alta-Med network in Orange County.

But even if the Medi-Cal expansion has some hiccups along the way, it’s almost certain that the people who are newly eligible for the program will be getting more care, and better care, than they were getting before the passage of federal health reform.

That’s also likely for more affluent Californians as well, but it’s not quite the sure thing.

Daniel Weintraub has covered public policy in California for more than 25 years. He is editor of the California Health Report at www.healthycal.org

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