Financial Problems Ahead for County-Run Medi-Cal Health Plans, Report Finds
Some of California's eight county-run Medi-Cal health plans -- including Health Plan of San Mateo, after which the others were modeled -- could become insolvent as early as next year, according to a report released Monday, the San Jose Mercury News reports (Noguchi, San Jose Mercury News, 5/12). HPSM is managed by the county in an effort to expand Medi-Cal beneficiaries' network of pharmacies, hospitals and doctors by providing higher reimbursement rates than traditional Medi-Cal. It covers an estimated 43,000 Medi-Cal beneficiaries in the county. In October, health plan officials warned that they would be forced to cease operations unless the plan received government funding. The health plan is losing about $600,000 a month because medical inflation has outpaced state contributions. In addition, because the health plan contracts directly with the county, the county-run hospital is ineligible for federal subsidies that most public hospitals receive (California Healthline, 4/14). The report indicates that the eight plans provide coverage to almost 500,000 people statewide and save the state $150 million per year because of lower administrative costs. The report, funded by the David and Lucile Packard Foundation, also found that the plans provide guaranteed access to doctors, better access to specialists and better customer service than traditional Medi-Cal. According to the Mercury News, the state "would like more counties to emulate programs" such as HPSM.
The state has frozen or reduced funding to the health plans for two years, Tim Reilly, a partner in Pacific Health Consulting, which wrote the report, said. Reilly said that the state has underfunded the plans by at least $150 million to $250 million, adding, "They're bleeding them to death." San Mateo County Supervisor Rich Gordon, who also is on the commission overseeing the county health plan, said, "These plans have been very effective in guaranteeing access to quality care," adding, "It wouldn't make any sense to say that's the direction we should be heading and have the poster child go bankrupt" (San Jose Mercury News, 5/12).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.