Federal Health Reform Could Cost California $2B-$3B Annually
Federal health care reform legislation will cost California $2 billion to $3 billion annually, according to an estimate from the California Health and Human Services Agency, the Los Angeles Times reports.
According to the Times, much of the burden for implementing federal health care reform will fall on states through the expansion of their Medicaid programs. Medi-Cal is California's Medicaid program.
The federal government beginning in 2014 will pay 100% of the cost of covering newly eligible Medi-Cal beneficiaries. The federal government will reduce its share to 95% in 2016 and then to 90% in 2020.
However, for residents who already qualify for Medi-Cal but are not enrolled in the program, the federal government will cover 50% of the cost.
Because the new legislation requires most U.S. residents to obtain coverage, Medi-Cal is expected to see an influx of beneficiaries who are eligible but not yet enrolled in the program.
Calls for Partnership With Federal Government
CHHS Secretary Kim BelshÃ© noted that California already has made significant cuts to Medicaid because of its mounting budget deficit.
She said, "This needs to be a partnership with the federal government," adding, "If Medicaid is going to be the foundation for broad health care expansion -- and right now it's very fragile -- we need changes in program flexibility and equitable financing."
Gov. Arnold Schwarzenegger (R) said, "I have always supported comprehensive health reform. However, for health care reform to succeed, states must have the flexibility to live within the revenues that are available to them or the federal resources to fully fund its mandates."
Marian Mulkey, senior program officer for the California HealthCare Foundation, said, "It's hard to imagine [health reform] being implemented as envisioned unless we get on a more secure state fiscal footing." CHCF is the publisher of California Healthline (Skelton, Los Angeles Times, 3/24).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.