New Report Shows Medi-Cal’s Expanded Reach

California’s Medi-Cal program has expanded in recent years from health coverage for the poor to regular insurance for millions of working adults, improving their health and boosting their productivity, according to a new report released Friday.

But those gains may be threatened by Medi-Cal’s low payments to doctors and other providers – nearly the lowest among all state Medicaid programs across the U.S., according to the study by the Bay Area Council Economic Institute.

The institute found that more than two-thirds of Medi-Cal’s adult beneficiaries, nearly 4.7 million people, are in the labor force, and a majority of those hold full-time jobs. An additional 2.8 million children and teens enrolled in Medi-Cal live in households where at least one parent is working.

“People think this is a safety net program for people who aren’t working, but that just isn’t true anymore,” said Micah Weinberg, president of the San Francisco-based think tank.

Weinberg said the program plays a critical role in improving the health of the state’s workforce, because Medi-Cal beneficiaries can get preventive and ongoing medical care. Better health translates into more-productive workers who stick with their jobs longer.

The paper estimated that employed people covered by Medi-Cal gain nearly five working days each year, increasing total personal income by $1.7 billion annually.

“People aren’t missing work, because they have health care coverage when they didn’t before,” Weinberg said.

But Medi-Cal’s low payments to providers have prompted lawsuits and legislation by advocates who argue that the inadequate reimbursement deters doctors from accepting patients enrolled in the program.

The state ranked 47th in the nation in reimbursement rates for traditional fee-for-service Medi-Cal in 2014, and health care providers receive far less from Medi-Cal than from private insurers, the institute said. Those rates do not include payments to Medi-Cal managed care plans, which account for over 75 percent of the program’s beneficiaries. But the report cited research that suggests the managed care payments are “likely of a similar order of magnitude” to fee-for-service Medi-Cal.

“It isn’t enough to say that millions of working families are covered by Medi-Cal,” Weinberg said. “We have to make sure that coverage results in meaningful access if we are going to get the productivity bump.”

More than 13.3 million Californians – about one-third of the state’s population – are now covered by Medi-Cal. Nearly 5 million have gained coverage since the Affordable Care Act took effect, expanding eligibility for the program.

The vast majority of working adults who gained Medi-Cal coverage were previously uninsured, holding jobs that didn’t offer health insurance. Being uninsured affected both their health and their productivity, said Larry Levitt, senior vice president at the Kaiser Family Foundation (Kaiser Health News, which produces California Healthline, is an editorially independent program of the Kaiser Family Foundation.)

“These are low-wage workers, and the numbers just don’t add up for employers to provide them with job-based health benefits,” Levitt said. “Medi-Cal is filling a gap that the business community couldn’t fill themselves.”

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Capitol Desk Medi-Cal