State Still Looks to Dun County Funds in Medi-Cal Expansion Proposal
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State Still Looks to Dun County Funds in Medi-Cal Expansion Proposal

The optional expansion of Medi-Cal will be administered using a state-based approach rather than the county-based plan being considered by California officials, the governor said yesterday when he proposed his May revise, the mid-year revision of the state budget.

That comes as welcome news to county health officials who have cautioned for months that a county-based system would be more confusing and costly than a state-based approach.

Gov. Jerry Brown listened, apparently.

“We want to do it generously, and boldly,” Brown said of the optional expansion. “There are some questions out there, so we want to do it prudently. It’s a matter of equity, and it’s something we’ll work out over the next few years.”

What needs to be worked out, Brown said, is the money the counties now receive for indigent care. When many indigent patients go on Medi-Cal counties will save quite a bit of money. That money needs to be shared with the state, Brown said.

“We don’t want to pay twice, that’s our point,” Brown said. He said about 60% of those eligible for Medi-Cal actually receive it nows. With mandatory expansion, that number is likely to go up to 80%, Brown said, “and the state pays half of that. There will be costs on the state budget.”

At the same time, he said, with optional expansion — paid through the first three years entirely by federal money — the counties stand to benefit greatly. “That represents a burden off the counties, it’s just not clear how much,” Brown said. “I don’t think the counties would argue they’re entitled to double payment. We’re adding two to three million new people. That will benefit the counties. It’s not clear how much that is and that has to be worked out, but it’s not fair that the counties be paid for what they’re not doing,” Brown said.

At yesterday’s press conference presenting the May revise, Brown made a pointed remark aimed at legislators working to repeal past health care cuts, such as the 10% Medi-Cal provider reimbursement rate cut. In answer to the idea that, since the budget and economy are doing better, some legislators think it’s time to restore some of the cuts that have been made in past years, Brown’s answer was about as clear as it could be.

“No,” he said, loudly.

After that word hung in the air for quite some time, Brown elaborated. “No, the money’s not there,” he said. “Anyone who thinks there’s spare change around here, they haven’t read the budget.”

Diana Dooley, Secretary of Health and Human Services, addressed the topic of the day, dropping the county-based approach to optional expansion:

“We agreed the state-based approach is the best choice,” Dooley said. “We will have the same comprehensive benefits as Medi-Cal, including mental health and substance abuse treatment.”

The notion of dropping long-term care as a benefit also fell by the wayside in the May revise. The state will includes long-term care, she said, as long as it can keep the asset test (the current eligibility requirement for Medi-Cal services that’s about to be replaced by a modified adjusted gross income number.) To keep the asset test for long-term care, the state will need get federal approval, she said.

The big question is how to come up with a formula for sharing those county savings from optional expansion, Dooley said.

“We have proposed a mechanism for assessing those costs, and evaluating and calculating what the net savings will be in this expansion,” Dooley said.  “We are working with the counties to assure proportional allocation, and to preserve the strong public safety net.”

That mechanism may change over time, Dooley said, adding it may take eight to 10 years of adjustments to get the formula of savings division just right.

“There will be a truing-up over the years,” she said. For instance, the state has calculated that the first-year savings to the counties would be about $300 million. “But we’re not going to take $300 million until we do the mechanism,” Dooley said. “There are many variables in this equation, who’s going to enroll, when they’re going to enroll … those are variables we need to watch.”

Toby Douglas, director of the Department of Health Care Services, put it a different way: “We’re looking at what they’re spending today, then looking over time [at] how that changes,” he said, “making sure any savings achieved are freed up and able to be used for other social services.”

Also included in the May revise is the intention to extend the managed care organization tax. It’s not clear yet where that money will be spent, if that effort is successful.

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