Medi-Cal Redesign Plan Would Include Premium, Cap on Dental Care, Expansion of Managed Care Coverage
Gov. Arnold Schwarzenegger (R), as part of his $112 billion state budget proposal, on Monday announced his "long-awaited" plan to redesign Medi-Cal, including a proposal to enact a monthly premium for 550,000 beneficiaries whose annual incomes exceed certain levels, the Contra Costa Times reports (Kleffman, Contra Costa Times, 1/11). The plan includes what would be one of the "biggest policy shifts" in the governor's budget proposal, such as an effort to transition more Medi-Cal beneficiaries to managed care programs, the Sacramento Bee reports (Benson, Sacramento Bee, 1/11).
According to the San Diego Union-Tribune, the proposed changes to Medi-Cal, which require approval from CMS, would result in 110,000 of the program's 6.6 million beneficiaries losing coverage (Ainsworth, San Diego Union-Tribune, 1/11).
Medi-Cal costs have increased by 50% over the past five years, while the state has added 1.2 million beneficiaries to the program (Contra Costa Times, 1/11). Schwarzenegger's plan would reduce state costs by about $260 million per year from the $34.1 billion program. About $191 million of the savings would come from billing the federal government for certain prenatal care services now funded by the state (Colliver, San Francisco Chronicle, 1/11).
The proposed monthly premiums would be set at $10 for adults and $4 for children, with maximum monthly premiums of $27 per family (Contra Costa Times, 1/11).
The premiums, which would go into effect in the 2006-2007 fiscal year, would apply to families whose annual incomes exceed the federal poverty level, elderly individuals with monthly incomes of more than $812 and elderly couples with monthly incomes that exceed $1,437 (Colliver, San Francisco Chronicle, 1/11).
According to the Los Angeles Times, the "bulk of savings" to Medi-Cal would result from increased use of managed care to include 13 additional counties and all of the state's elderly, blind and disabled beneficiaries. About half of Medi-Cal beneficiaries currently receive coverage through managed care plans, the Times reports. Schwarzenegger estimated that the increased Medi-Cal beneficiary enrollment in managed care, which would be implemented in 2007, would save the state $136.6 million (Rau, Los Angeles Times, 1/11).
The redesign also would cap adult dental benefits at $1,000 annually and allocate $5.9 million from the state general fund and $8.6 million in federal matching funds to help state residents apply for Medi-Cal and Healthy Families (Contra Costa Times, 1/11).
Schwarzenegger said that although he "would like to spend much more money" on "important" programs, "we must live within our means." He added, "There is great virtue in providing services to the people, but it is also virtuous to be wise and responsible with the hard-earned money people paid to the state in taxes" (Gledhill, San Francisco Chronicle, 1/11).
Health and Human Services Agency Secretary Kim Belshe said the addition of a monthly premium for some Medi-Cal beneficiaries was a modest proposal that would be consistent with premiums charged by employer-sponsored health plans and Healthy Families. Belshe said that the fee would emphasize personal responsibility and encourage Medi-Cal beneficiaries to take ownership of their use of health care services (Contra Costa Times, 1/11).
Advocates said that the redesign could result in Medi-Cal beneficiaries losing coverage or experience problems accessing care, but some of the "deep cuts" that had been expected from the "much-touted overhaul ... did not materialize," the San Jose Mercury News reports (Folmar/Marimow, San Jose Mercury News, 1/11). Contrary to some expectations, the plan would not eliminate benefits entirely, narrow eligibility, establish a tiered benefit system or reduce rates paid to Medi-Cal providers.
Carmela Castellano-Garcia, CEO of the California Primary Care Association, said, "Some of the more onerous things we anticipated, we do not see," adding, "We're cautiously optimistic."
However, Castellano-Garcia and others said they would oppose the proposed Medi-Cal premium, which could cause some affected beneficiaries to leave the program.
Health Access Executive Director Anthony Wright said, "We believe this will cause a lot of those families to fall off the program," adding, "While the governor says no new taxes, half a million Californians will have to pay more for health coverage" (Contra Costa Times, 1/11). Wright added, "As we expected, there's a major impact on the most vulnerable" (Sacramento Bee, 1/11).
Castellano-Garcia also said that although the premium would be a modest amount, "Medi-Cal patients are already surviving on very little. This is a huge issue for these low-income individuals" (Contra Costa Times, 1/11).
Angela Gilliard, a lawyer at the Western Center on Law and Poverty, said, "Four dollars may not seem like a lot, but there are people who don't go to the doctor because they don't have bus fare. If they don't have bus fare, how are they going to have the (premium)?" (Sacramento Bee, 1/11).
Castellano-Garcia added that current Medi-Cal beneficiaries who would lose coverage under the proposal would have to seek care at community health clinics, which currently face obstacles providing services to people who seek treatment (Contra Costa Times, 1/11).
According to the Chronicle, officials at state public hospitals also are concerned that as patients move to managed care coverage, patient volume and federal funding will decrease (Colliver, San Francisco Chronicle, 1/11).
Robert Hertzka, president of the California Medical Association, said that although managed care for the disabled, "would be disruptive of pre-existing doctor-patient relationship[s]," the redesign plan on the whole "largely spare[s] the state's health programs, with some exceptions" (Los Angeles Times, 1/11).
Treasurer Phil Angelides (D), who is expected to run for governor in 2006, said, "The only sacrifice being asked [in the budget] is by those who have the least. There is no morality to this budget" (Drucker/Sheppard, Los Angeles Daily News, 1/10).
Wright said, "What Gov. Schwarzenegger is proposing is not one-time cuts during a bad moment, but long-term changes in how we care for seniors, children and people with disabilities" (Colliver, San Francisco Chronicle, 1/11).