Expanding Medicaid Called ‘Right Thing To Do’

The CEO of a trade group representing safety net health plans in 26 states hopes other states follow California’s example and make plans now to expand Medicaid.

“The Supreme Court’s ruling on the expansion of Medicaid is unlikely to materially affect the efforts of health plans in California since the state has indicated that it would participate in the expansion,” said Margaret Murray, CEO of the Association for Community Affiliated Plans, which represents 59 non-profit safety net health plans in 26 states.

“We hope other states do likewise. Approving the expansion of coverage to working families with low incomes is the right thing to do,” she said.  “Many of our plans in California have discussed the possibility of participating in the health insurance exchanges set forth in the Affordable Care Act, along with the Basic Health Program, should the state move forward with that option.”

The Supreme Court last week ruled that the federal government cannot withhold current Medicaid funding from states that opt out of Medicaid expansion provided for in the Affordable Care Act. California is firm in its commitment to expand coverage but many other states are in a state of limbo.

The federal government will pay 100% of states’ costs for expanding Medicaid the first three years and then 90% thereafter. ACA calls for expanding Medicaid coverage to people under 65 whose income is at or below 133% percent of the federal poverty level, or about $30,000 for a family of four.

Before the ruling, the ACA Medicaid expansion provision allowed the federal government to withhold existing Medicaid funding from states that chose not to expand their Medicaid programs. The Supreme Court ruled the punishment for not participating stepped over the legal line.  Now if states opt out, they will continue to receive funding for their current enrollees but not be entitled to increased federal funding for new ones.

As a jumping-off point to Medi-Cal expansion, California takes advantage of a five-year Medicaid waiver program, “Bridge to Reform,” ending in 2015. The waiver program, implemented by county health agencies, is bringing about two million new enrollees into Medi-Cal with $10 billion in federal resources.

Medi-Cal plans agree that the waiver program is giving them an edge in preparing for expansion. Health Plan of San Mateo, which covers 62,000 lives under Medi-Cal, serves as a third-party administrator for the county-based waiver program.

The plan’s CEO, Maya Altman who was pleasantly surprised by the Supreme Court rulings, is confident California will continue to expand Medi-Cal and work toward creating a higher quality, less costly delivery system.

Elia Gallardo, executive director of the dual eligible program for Alameda Alliance for Health, agrees. Gallardo anticipates the state’s expansion will open the door to Medi-Cal for 225,000 people in her community.

Despite California’s readiness for the Medicaid expansion in 2014, health care costs in general still pose a major challenge.  The Association of California Health Plans said health care spending in the state tripled between 1991 and 2009 to more than $230 billion and is expected to more than double before the decade ends.

(David Gorn is on vacation.)