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Finance, Health Care Linked in Expansion Effort

State health care and finance officials met for the first time with stakeholders Friday to outline some of the differences between two possible approaches — state-based or county-based — to implementing the state’s optional Medi-Cal expansion.

Many details of the proposed expansion of Medi-Cal are unknown, state officials said Friday because they’re waiting for more federal guidance in many areas. One important detail is known: the federal government will fully pay for the expansion benefits for new enrollees for the first three years.

Diana Dooley, the state’s Secretary of Health and Human Services, said implementing the expansion will be influenced in equal parts by financial and health care considerations.

“It’s a fundamental change in the roles and responsibilities between the state and the counties in service of these people. We have to sort that through,” Dooley said Friday.

“There isn’t a distinction between finance and policy,” she said. “We can’t talk about policy without taking about finance, and we can’t talk about the financing without discussing policy.”

The choice between the two approaches is wide open, said Ana Matosantos, director of the Department of Finance.

“This is broader than health conversations have been,” Matosantos said. “Our county partners have the principal responsibility to care for this population. What we need to decide is what should happen to the funding stream.”

“Option one is, we envision a swap of programs,” Matosantos said. That is, the state-based approach would offer the same benefits as the current Medi-Cal system, minus the long-term service and support benefits.

“We would, under the state plan, continue to use our Medi-Cal managed care plans,” said Toby Douglas, director of the Department of Health Care Services. “It would be the same delivery system.”

“Option two,” Douglas said, “is that we’ve expanded coverage to childless adults in the Low Income Health Plan program and counties have developed their own delivery systems to meet the unique needs of the counties. Building off of these LIHP programs, all 58 counties would build their own delivery systems for the expansion population. And again, there would be no long-term services provided. Eligibility would happen through the counties,” Douglas said.

Stakeholders repeatedly brought up concerns about losing the health care safety net in the county-based plan, since oversight would be more difficult with 58 California counties running their own delivery systems.

“When you look at the two options, it doesn’t seem that efficient for 58 counties to do their own delivery systems,” said Ellen Wu, executive director of the California Pan-Ethnic Health Network and board member of the state’s Managed Risk Medical Insurance Board.  “We’re also concerned about the safety net infrastructure,” she said. Wu said it was important to make sure make sure counties have similar coverage requirements “before money is shifted too quickly.”

Douglas said he and other state officials have identical concerns.

“The reason we have two options is that we are so committed to having a strong safety net system,” Douglas said. “We are working with Covered California (the state’s health benefit exchange) to create a bridge plan so these individuals can stay within the system.”

Related Topics

Capitol Desk Medi-Cal The Health Law