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Budget Revision May Bring Medi-Cal Expansion to a Head

Hoping to end a stalemate in California’s debate over how to expand Medi-Cal, a health advocacy group has come up with a compromise proposal.

Health Access California proposes a time frame and percentages for the state and counties to share $1.4 billion in savings when Medi-Cal coverage is expanded through the Affordable Care Act next year. State and county officials have been wrangling behind closed doors about how the windfall should be divided.

“These negotiations are at a logjam,” said Anthony Wright, executive director of Health Access California. “For us to move forward with Medi-Cal expansion, the governor wants to restate the relationship between the counties and the state. But the two proposals in the budget have not been seen as viable.”

The new plan for expanding California’s Medicaid program strikes a balance between the state’s desire for a piece of the county savings and the counties’ desire for needed health care dollars, Wright said.

The new plan would allow the counties to establish a health care infrastructure by keeping the federal expansion dollars for the first three years. After that, expansion dollars would be divided between the state and counties, but to receive funding, counties must demonstrate need, Wright said.

“We think this addresses [Gov. Jerry Brown’s] desires and concerns, but also meets other principles,” Wright said. “We want to make sure there’s a safety net that survives and thrives, combined with the desire for state savings that recognizes the needs of the remaining uninsured.”

Part of the Health Access proposal involves maintaining the Low Income Health Program, which is due to expire in 2014.

“We want to use the LIHP to serve the residually uninsured,” Wright said. “It’s a great bridge to Medi-Cal coverage, and we don’t think they should expire at the end of the year. … If counties can show need, they can keep the funding for that need.”

The conversation about Medi-Cal expansion should not just be a closed-door debate with counties over realignment, Wright said.

“This can’t be just a money conversation between the state and the counties,” he said. “The people with the most at stake here are California families. And their interests need to be represented in this conversation. This proposal allows counties to keep resources, but they don’t get a blank check.”

The Legislative Analyst’s Office has agreed to review and comment on the new plan, putting pressure on the state to present its own answers soon. The governor’s budget revision proposal, due May 14, is expected to focus and intensify the debate.

The LAO analysis will go a long way toward determining whether the Health Access proposal has a chance of becoming public policy.

State Officials Reluctant To Embark on Third Option

Toby Douglas, director of the state Department of Health Care Services that administers Medi-Cal, was reluctant to entertain the Health Access proposal.

The Medi-Cal expansion decision, Douglas said, “has to be all the components of either option, and not another option. It needs to be affordable and sustainable, and it has to include those two components.”

Time’s a wasting, Wright said.

“We are cognizant that open enrollment is five months away. We think it’s really important to get to a resolution,” Wright said. “If we lose that time to start enrolling people, that’s not just loss of coverage, that’s money we’re leaving in Washington, D.C., that’s not going into the California economy.”

Deadlines will be met, Douglas said, adding that it’s important to get the fundamental principles right first before implementing them.

“The focus of the administration and the governor is a commitment to the optional expansion, and working on one of two different options,” Douglas said. “The goal is to create an approach that’s affordable and sustainable. And to preserve the safety net. Those are the principles.”

Legislators Losing Patience

Assembly member Holly Mitchell (D-Los Angeles) did her best to get an answer on the details of the two roughly outlined choices for optional Medi-Cal expansion — a state- or county-based approach — at a budget subcommittee hearing this week.

Douglas did not reveal much.

“We hear repeatedly … the concern about time,” Mitchell said to Douglas. A lot of time is spent, she said, making sure the Covered California health benefit exchange is up and running.

“But on Medi-Cal expansion,” Mitchell said, “it feels like a hurry-up-and-wait kind of attitude.” She asked Douglas how much time the state would need to properly implement Medi-Cal expansion from the time the governor signs it into law.

“We want to come to a decision as soon as possible,” Douglas said. “We have two alternatives, and we want to work through those. So the sooner we do, the better, from our perspective. … At this point, I can’t give you a set date. Our goal is to be ready Jan. 1. The sooner we make a decision, the better.”

But, Mitchell responded, the state has not made a decision. It has been more than three months since the two Medi-Cal expansion options were first raised.

“My concern is, if the administration continues to fixate on the two [options] proposed in the budget, it’s pretty clear to me that the Legislature’s not going to go down that road,” Mitchell said. “If that’s where we’re stuck, I restate my concern about a Jan. 1 rollout because it feels like we’re spinning our wheels and frankly wasting a lot of time now, going back and forth in the debate over which of the two options, when this body has begun to send a pretty clear message that those options, as articulated in the budget, are not viable. So … where does that leave us?”

Douglas laughed a little at that. “I hear you loud and clear,” he said. “We want to work with the Legislature. The options include both a state-administered and county-administered option, as well as including the changing role of the state and counties. So both pieces — the delivery system, as well as the changing role — need to be part [of the conversation].”

That kind of thrust-and-parry exchange has bobbed to the surface in public debate because the time frame to begin enrolling Californians in expanded Medi-Cal, the exchange and other Affordable Care Act programs is so short.

Open enrollment for ACA programs begins in October. State officials hope to launch major advertising and outreach campaigns this summer, so details about how the system will work need to be ironed out now, according to health advocates and some legislators.

Related Topics

Insight Medi-Cal