At a legislative hearing yesterday, state officials said the estimates for savings have been reduced for the Healthy Families transition to Medi-Cal managed care.
According to the Legislative Analyst’s Office, the original estimated general fund savings for the Healthy Families transition was $13.1 million in 2012-13. The estimate has shrunk to $137,000. Savings for next fiscal year — 2013-14 — were estimated at $52 million and that estimate has been revised to $43 million.
Scott Ogus, who represented the Department of Finance at yesterday’s hearing, said there were several factors contributing to the revision. Delays in implementation by the Department of Health Care Services led to caseload changes. DHCS officials have said the department slowed down some of the early phases of the transition so children would have less disruption in continuity of care.
“The main reason for the erosions is because of caseload changes,” Ogus said. “Those eye-popping numbers from $13 million to $137,000 are due to some of these delays.”
Sen. Bill Emmerson (R-Redlands) was not pleased with the fiscal projections, coming on the heels of some recent access issues.
“Last year I opposed eliminating Healthy Families,” Emmerson said at yesterday’s hearing, “and all information I’ve seen since then confirms that [was the proper stance]. The latest network assessment shows much more limited networks than the Healthy Families network did.”
Emmerson said the Legislature voted for Healthy Families elimination based on the money that would be saved from it. Significant savings have not materialized, he said.
“We were told last year, shifting it would save $13 million, now we see we’re paying an extra $10 million in administrative costs. So the savings is practically zero,” Emmerson said. “You say we’re going to save $42 million this year, and you can count me as a skeptic.”
State officials also said yesterday savings estimates have also shown erosion for the duals demonstration project, now known as Cal MediConnect.
State officials said that’s due, in part, to the smaller number of allowable participants in the eight-county demonstration project moving dual-eligibles (those eligible for Medicare and Medi-Cal coverage) into Medi-Cal managed care plans. Federal officials capped enrollment numbers in Los Angeles County and did not approve the state’s request for a six-month lock-in for participants.
DHCS officials said they will submit an updated fiscal estimate for the duals project with the May budget revision.
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