San Francisco Chronicle, February 1, 2013
The Legislature is in a special session on health care to consider legislation that's designed to help California prepare for full implementation of the federal Affordable Care Act. Most Americans will have to buy health insurance in January 2014, or pay a penalty for not doing so.
There are exceptions to this rule, of course, and one of the most important things that the Legislature is working on is the question of how to help the lowest income Californians get coverage. Assembly Speaker John Pérez, D-Los Angeles, has introduced AB1X1, which would greatly expand Medi-Cal, the state's health insurance program for the poor.
Pérez's bill, which follows federal guidelines, would expand eligibility to most adults who are making up to $15,400 per year, or up to about 138 percent of the federal poverty level. Estimates suggest that this would mean coverage for an additional 1 million-plus Californians.
In the state Senate, President Pro Tem Darrell Steinberg, D-Sacramento, has introduced a similar measure.
Expanding Medi-Cal is the right thing to do, and it's the easiest way for California to meet some of its responsibilities to lower-income people under the federal health care act. This is great for poor Californians, who will finally get access to primary care and other critical health services.
But there are cost savings for all Californians, because uninsured people tend to go to the emergency room, where the costs for care are far higher, rather than schedule a visit to a doctor. ER costs then drive up the price of medical care for everyone, including the insured.
Plus, the federal government will pay for the first three years of the Medi-Cal expansion, and no less than 90 percent in the years after that. The state will have to pay administrative costs during those first years - between $46 million and $75 million in 2014, according to a research study from UC Berkeley's Center for Labor Research and Education. That amount seems minimal, considering the size and scope of this benefit.
But the Medi-Cal expansion creates many new challenges, starting with: From where will the doctors come?
"We don't have enough providers for all the new people who will be coming into the health care system," said California Insurance Commissioner Dave Jones. Jones would like to see the University of California find ways to "expand the pipeline" of doctors.
He suggested enlarging the university's residency and debt-forgiveness programs, and added that "the Legislature will have to take that on." It's likely that California will have to find new ways to distribute care, he said, perhaps through clinics or pharmacies.
Another problem is that the state slashed Medi-Cal reimbursement rates by 10 percent in its 2011-12 budget in an attempt to balance California's ever-temperamental budget. This has happened before.
This time, however, health care providers sued. The case is still tangled up in the federal courts, but it points to a larger problem with Medi-Cal.
Medical providers are reluctant to agree to cover patients under an insurance program that reimburses them at unreliable and ever-shrinking rates. As a result, the state has had trouble attracting new providers. That's been difficult enough for current Medi-Cal patients, but it's likely to create enormous headaches once an additional 1.4 million people are in the system, eager to obtain care.
The state is reforming Medi-Cal by shifting it from a fee-for-service plan to a cheaper system of managed care, but that won't be enough to handle the larger challenges of provider access and cost containment.
These are daunting structural challenges that will hang over not just Medi-Cal recipients, but everyone who needs health care. The state may have to raise Medi-Cal reimbursement rates and encourage the universities to expand their medical programs - steps that affect health care for us all.