State Officials Uncertain About Cost of Expanding Medi-Cal Under ACA

As California prepares to expand Medi-Cal coverage under the Affordable Care Act, state officials are raising questions about how much the expansion will cost, the Los Angeles Times reports. Medi-Cal is California's Medicaid program (York, Los Angeles Times, 12/25/12).

About the Medicaid Expansion

Under the federal health reform law, states have the option of expanding Medicaid coverage to individuals with incomes of up to 133% of the federal poverty level. The law's Medicaid expansion provision also will expand coverage to low-income adults who have no children.

The federal government has given states the option of offering less comprehensive benefits to new beneficiaries and making the pool smaller.

Medi-Cal currently enrolls nearly eight million beneficiaries.

If California implements the full expansion, it could offer coverage to 1.5 million more residents (California Healthline, 12/11/12).

Uncertainty About Costs

State officials are unsure how the Medicaid expansion will affect state spending because of uncertainty about:

• How many residents will enroll in Medi-Cal when the ACA takes full effect in 2014;
• How much it will cost to cover the new beneficiaries, since it is unclear whether the new enrollees will be more or less healthy than current beneficiaries; and
• How much the federal government will contribute to cover the cost of the Medi-Cal expansion (Los Angeles Times, 12/25/12).

Brown Expresses Concern

Gov. Jerry Brown (D) said that although he wants California to continue expanding health insurance coverage, he also wants to ensure that the state does not foot the bill for covering millions of people who currently are uninsured.

Brown said, "My concern is that as we add one to two million new people to Medi-Cal, the federal government says they're going to pay 100% of the costs, but now suddenly if they're saying they may only pay 70% or something else." He added, "That would be a huge threat to the [state's] general fund" (York, "PolitiCal," Los Angeles Times, 12/21/12).

California already faces a $1.9 billion budget deficit for the 2013-2014 fiscal year (Los Angeles Times, 12/25/12).