New Waiver Sets Bar High for Other States

“It was a long wait,” Norman Williams of the state’s Department of Health Care Services said with a slight sigh. “But it was worth it. This is a good day for California.”

Williams is talking about the Medicaid waiver, which sets the structure and facilitation requirements for California’s Medi-Cal program. The waiver is worth up to $2 billion a year in federal funding to California for the next five years. This waiver is a huge accomplishment, Williams said, because it takes all the elements of national health care reform, and puts them into practical use.

“This is such an important step,” Williams said, “because it allows us to completely restructure California’s health care system, and to rein in costs in Medi-Cal.”

The waiver has three main elements that represent that restructuring:

  • Expansion of coverage to uninsured adults, ages 19 to 64, which means health care coverage for up to half a million more Californians;
  • Mandating that seniors and people with disabilities move to a managed care plan, a program that will be phased in over the next year and a half;
  • And establishment of a safety net pool of funds to help upgrade care at hospitals throughout the state.

According to Peter Harbage, a health care expert who runs Harbage Consulting, those happy state officials have good reason to beam.

“This waiver is going to change and improve some of the fundamental ways Medi-Cal operates,” Harbage said. “It’s going to grow the safety net system. So I think they have every reason to be proud of this waiver.”

Especially when you consider the state of California’s economy and the mistrust that engenders, Harbage said, it has been a daunting task, along with the short time frame of two years to put many different elements of health care reform into place.

“The state really pulled it off,” he said. “Combine it with success of the hospital provider fee and passage of the [health benefit] exchange, it’s really an amazing legacy for the governor.”

According to Tony Cava, spokes person for DHCS, the expansion of coverage to 500,00 uninsured adults will begin immediately. “The first step is counties have to have time to enroll people and get them into the system,” Cava said.

“Basically we’ll send out a letter to the counties, and they have to decide to be part of the program,” Cava said. “Then we’ll start to draw down the federal funding. That will happen as early as 2011. The earliest counties will start to enroll people as early as next year.”

The plan to move seniors and the disabled to managed care plans will move more incrementally, he said. “It will become effective June 1, 2011,” Cava said, “and will phase in over a 12-month period.”

The one major element that California dropped was an attempt to solve the “dual eligible” problem, where seniors who get both Medi-Cal and Medicare would have those two funding sources combined and coordinated in some way. That effort proved too complicated for California officials to include in the waiver.

“I believe we got the important elements we were looking for,” Williams said. “We are able to expand coverage to more uninsured adults. Seniors and those with disabilities are moving over to managed care, which should improve quality and outcomes. And the safety net pool allows us to pool investments in infrastructure improvements, and offer hospitals incentives to  improve quality of care.”

This is what many people had in mind when talking about national health care reform, Williams said, so the satisfaction with the waiver cuts both ways.

“California has always been a bellwether, and we plan to continue to do that,” he said.

“Change can be difficult, so we want to give people as much information as possible. We want to move people forward to the medical home concept, and  coordinate all of their care. We think this means good things for people in California.”

Related Topics

Capitol Desk Medi-Cal