Tightened Medi-Cal Eligibility Rules Could Drive Up Premiums

A proposal to tighten eligibility rules by Gov. Arnold Schwarzenegger (R) would result in higher health insurance premiums for insured Californians as doctors and hospitals shift the costs of treating more uninsured patients, according to a new study commissioned by Health Access California, the Sacramento Bee reports.

Medi-Cal is the state's Medicaid program (Rojas, Sacramento Bee, 8/15).

In his revised budget proposal released in May, the governor called for reducing the income eligibility level for Medi-Cal for two-parent households to 61% of the federal poverty level and for reinstating a rule that limits Medi-Cal eligibility to families in which the primary wage earner does not work more than 100 hours per month.

Schwarzenegger also proposed tightening income eligibility guidelines for single parents (California Healthline, 5/15).

An earlier study by Health Access estimated that such changes to Medi-Cal would result in more than one million people losing coverage.

Health care consultant Peter Harbage conducted the new study for Health Access using the same methodology that he used in research about a "hidden tax" that resulted from insured Californians paying higher insurance premiums to help offset providers' cost of treating the uninsured.

Gov. Schwarzenegger often cited the research when he was stumping for his health care reform proposal.

Harbage said, "Any time the state is going to move to take money out of Medi-Cal, those costs are going to get transferred somewhere." He added that a hospital that treats an uninsured patient "is going to try to recoup its cost by charging other people more."

Harbage's study for Health Access forecasts annual premium hikes of more than $290 per family.

Lisa Page, a spokesperson for the governor, did not dispute the report's findings, saying that the research "underscores the need for comprehensive health care reform, as the governor has outlined" (Sacramento Bee, 8/15).