California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Study: Reform Law To Expand Coverage, Hike State Spending

The federal health reform law will help about six million uninsured Californians obtain health insurance by 2016, but it also will increase overall state spending by 7%, according to a new RAND study, the Sacramento Business Journal reports.

The study, sponsored by the Council of State Governments, also examined how the law will affect Connecticut, Illinois, Montana and Texas (Robertson, Sacramento Business Journal, 4/5).

Researchers predicted that the percentage of uninsured residents would decline significantly in all five states and that state spending would rise in all of the states except Connecticut (Manos, Healthcare Finance News, 4/5).

Connecticut is an exception because some low-income individuals covered under a state-administered insurance plan will become newly eligible for Medicaid under the overhaul. The federal government is covering a substantial portion of the costs for newly eligible Medicaid enrollees (RAND report, 4/5).

California-Specific Findings

The RAND report also found that:

  • The proportion of California residents with health insurance will increase from 80% today to 96% by 2016;
  • The number of uninsured Californians will decrease from 7.5 million today to 1.6 million by 2016;
  • Enrollment in Medi-Cal, California's Medicaid program, will increase by 58% by 2016;
  • About 17% of nonelderly California residents will receive coverage through the state health insurance exchange by 2016; and
  • The reform law will increase state spending by $2 billion annually by 2016 and by $4 billion annually by 2020.

Reasons for Changes in Coverage, Spending

Researchers said the reform law will increase access to health insurance because Californians will be able to obtain coverage through the state health insurance exchange and the forthcoming expansion of Medi-Cal.

They also noted that the Medi-Cal expansion would contribute to the predicted higher levels of state spending (Sacramento Business Journal, 4/5).

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.