Medi-Cal Costs Increasing Faster Than Revenue, Study Finds
Medi-Cal costs are expected to increase by 8.5% per year over the next several years, outpacing a 6% annual growth in revenue, according to a Public Policy Institute of California study released on Tuesday, the Sacramento Bee reports.
The study, which Health and Human Services Agency Secretary Kim Belshe commissioned, estimated that Medi-Cal could account for one-fifth of state spending by 2015. Medi-Cal currently accounts for 15% of the state general fund budget.
Among Medi-Cal recipients not enrolled in managed care, 5% accounted for 60% of costs, the study found. Data for beneficiaries enrolled in managed care were not available. Researchers found that the "small group of top consumers" uses health care services in such a quantity that state costs would be reduced by only 3% if benefits for the healthiest 75% of beneficiaries were reduced by half, the Bee reports.
Researchers found that older, less healthy beneficiaries, including those in nursing homes, accounted for the majority of Medi-Cal costs. The largest cost drivers also included hospital services and prescription drugs.
The Schwarzenegger administration said the study's findings support a proposal to move 500,000 elderly and disabled beneficiaries into managed care plans. Schwarzenegger's plan, which was partially rejected in legislative budget committees, also would cap dental benefits and introduce premiums for some beneficiaries.
Some patient advocates have "point[ed] out that Medi-Cal costs have been rising more slowly than health care costs in general," the Bee reports. In addition, some have said that Schwarzenegger's plan would provide less care for people with chronic illnesses and might not reduce costs (Benson, Sacramento Bee, 6/15).