Orange County Register Examines Possible Effects of Medi-Cal Overhaul
The Orange County Register on Thursday looked at proposed Medi-Cal reforms and "nervous" health care advocates who are worried that the $400 million in estimated annual savings "will come from knocking the vulnerable out of programs and shortchanging safety-net hospitals" (Hinch, Orange County Register, 7/29). The Department of Health Services in January announced the launch of a yearlong effort to reform Medi-Cal, which covers about 6.8 million California residents, as part of the fiscal year 2004-2005 budget that Gov. Arnold Schwarzenegger (R) proposed earlier this year. In March, Secretary of Health and Human Services Kim Belshe said five working groups had been formed to develop Medi-Cal overhaul plans and to provide state officials with input from legislators, beneficiaries, local government officials, providers, health plans and others directly affected by the reforms. Plans proposed by state health officials include increasing the number of beneficiaries enrolled in managed care plans; dividing adult beneficiaries into two different payment groups based on income; and eliminating coverage for some optional benefits such as acupuncture and chiropractic care. (California Healthline, 4/13). Schwarzenegger must receive legislative approval for the overhaul, as well as a federal waiver, for which the administration plans to apply in September. The administration, which had originally been scheduled to unveil details of the overhaul in May, will formally announce their Medi-Cal plans next week.
While the specifics of the reforms are being "kept secret" by a "handful of health experts" who are "quietly finalizing" the largest overhaul of Medi-Cal in state history, advocates contend that the plans could eliminate beneficiaries and eventually drive up total health care costs, according to the Register. The Register reports that studies by the Kaiser Family Foundation and the Center on Budget and Policy Priorities found that states that have enacted some of the possible aspects of the overhaul in their Medicaid programs, including higher copayments for beneficiaries, "ended up losing money" because beneficiaries dropped out of the program, federal matching funds were reduced and emergency department costs increased. Additionally, hospital officials have said that the federal waiver provision calling for stricter accounting procedures could cost state hospitals up to $1 billion, or about half the amount they receive in federal funding for indigent care.
Jack Lewin, CEO of the California Medical Association, said that the plan will probably include an expansion of county-sponsored HMO plans, which doctors and advocates say will help disabled patients to find care at a decreased cost to doctors. However, Isabel Becerra, chief operating officer of the Santa Ana-based Coalition of Orange County Community Clinics, which serves 183,000 low-income and uninsured Orange County residents, said, "What we've seen so far concerns us." She added, "We feel there will be barriers in the proposal that will bar people from services. ... That will be very detrimental. Some people will be rolled off Medi-Cal." According to Ron Kaufman, chief medical officer for Tenet Healthcare, the overhaul "is a source of anxiety" for health care professionals. "You'll see a brownout of unfunded patients shifting to private facilities which are already razor thin, and they'll start closing," Kaufman said (Orange County Register, 7/29).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.