Questions Raised Over Medi-Cal Estimates

The Assembly Budget Subcommittee on Health and Human Services this week heard a number of questions raised about the state’s estimate of mandatory expansion Medi-Cal enrollees.

The questions arose during a Department of Health Care Services presentation Monday on the cost of newly enrolling people into Medi-Cal who would have been eligible for it before this year. Federal dollars pay 100% for two years of the newly enrolled under optional Medi-Cal expansion, but the state needs to kick in half of the cost for those who were previously eligible.

New beneficiaries who would have qualified before the Affordable Care Act expansion are considered “mandatory expansion” enrollees.

DHCS officials estimated the state’s cost for mandatory expansion beneficiaries over the next two years will be about $600 million based on officials’ estimates of caseload. Caseload estimates also came under question, but the main opposition from the Legislative Analyst’s Office came on a different front.

“The bigger issue is a non-caseload issue related to the mandatory expansion — the associated per-member cost for these additional enrollees,” said Ross Brown, a fiscal and policy analyst for the Legislative Analyst’s Office. The state estimated a cost of $600 million over a two-year period, but the per-enrollee cost could be much lower than state estimates, Brown said.

“The May revision assumed a much higher per-member per-month cost for fee-for-service enrollees, about three times higher than previous assumptions,” Brown said. “Even if a significant percentage of new enrollees enrolled in fee-for-service, it’s unclear why the average cost would be significantly higher — three times as high — for this population.”

The LAO had a lower estimate — about half the state projection — $300 million over two years.

Assembly member Wesley Chesbro (D-Arcata) pointed out that time is short in the May budget negotiations and wondered about a timetable for clarification.

“I’m hoping in the next few days we should get some clarity on the estimates,” Brown said.

The caseload estimate also might be flawed, said Elizabeth Landsberg, director of legislative advocacy for the Western Center on Law and Poverty.

“We are very proud that California has done such a terrific job enrolling 1.9 million Californians, but we do have some questions about the estimates,” Landsberg said.

“How have the departments considered the 900,000 pending [Medi-Cal eligibility] cases?” she asked. “My understanding is that they’re assuming 85% of those 900,000 will be ultimately determined eligible.”

That estimate seemed highly optimistic to Landsberg. “We have reason to believe there are a number of duplicate applications, and we wonder what the assumptions around those duplicate applications have been,” Landsberg said. “Also unfortunately not all of those folks would ultimately be found eligible, so we encourage additional scrutiny of those assumptions. It’s going to take a little more time to sort through these numbers.”

The subcommittee decided to hold over the issue “for a couple of days,” according to subcommittee chair Shirley Weber (D-San Diego), until some of the questions around Medi-Cal estimates can be clarified.

Related Topics

Capitol Desk Medi-Cal