Gov. Jerry Brown has released his new state budget, including plans for implementing the Affordable Care Act in California. In a press conference this morning, the governor said he plans to handle that implementation "cautiously."
"We are committed to expanding Medi-Cal, we’re committed to bringing more people into the healthcare system, but we recognize there are big costs out there," the governor told reporters. "There are big unknowns so we’re going to move carefully, but we’re going to move with commitment, because I believe people do need decent healthcare, and I believe what Pres. Obama did was historic. It was heroic, and I’m going to do everything I can to be a good partner to make sure his plan works."
The ACA calls for an expansion of the Medicaid program, known as Medi-Cal in California. The federal government will pay 100 percent of the costs of the new enrollees through 2016. After that, the federal contribution will decline to 90 percent by 2020.
The governor is proposing two ways to handle the expansion.
The first option would be a pretty straightforward expansion of the existing program, which would cover people earning up to 138 percent of poverty as described in the federal law. But the governor is proposing that this expansion would cover only health care costs, not long term care costs.
The governor's second option would be a county-based expansion. Counties would build on the Low Income Health Program, also called the "Bridge to Reform," currently in place in 55 of 58 California counties. In a press call with reporters, California's Secretary of Health and Human Services Diana Dooley pointed out the counties stand to benefit financially from the influx of federal dollars when new enrollees enter the system. Both proposals acknowledge that counties benefit.
"It is a recognition they will have costs reduced," Dooley said, referring to counties. "The relief to the system is a relief to the counties whether we do it at the counties or whether we do it at the state. The counties have the obligation to provide care to this population and that obligation will be satisfied with new federal funds. So the conversation has to be what is an appropriate sharing of that new relationship with the availability of new federal funds."
Dooley did not put a timetable on reaching a decision of which path to take, but said "the conversation starts today."
While those newly eligible for Medi-Cal under the Affordable Care Act will be funded 100 percent by the federal government, many tens of thousands of people currently eligible but not enrolled are also expected to sign up for Medi-Cal. That's because of several factors. The individual mandate requires everyone to have health insurance, and the Affordable Care Act requires more streamlined enrollment into state run Medicaid programs. The Health Insurance Exchange, Covered California, is expected to launch a major marketing effort to bring people in to purchase insurance. Many people eligible for Medi-Cal will likely respond.
The federal government is not picking up the whole tab of this currently-eligible-but-not-enrolled population. The state has put $350 million in the budget as a "placeholder," Dooley said. It's hard to be sure if that's enough or too much money. Dooley discussed the difficulty of determining true numbers because estimates of how many people will enroll vary widely. One recent report showed that between 240,000 and 510,000 currently eligible people are expected to be enrolled between 2014 and 2019. That's a big differential.
At a rally by health advocates in San Francisco today, Linda Lew of Health Access chided the state for being so careful. "It's good to be cautious," she told KQED's Mina Kim, "but in some ways it's needlessly cautious. The Medicaid expansion is one good example. The first two years are 100 percent federally funded and subsequent years are 90 percent funded, so it's not going to be a huge lift on the state."
In a statement on its website, the California State Association of Counties said it was "pleased" that the governor is moving ahead with implementing the Affordable Care Act. But the group echoed the Administration in discussing the challenges.
"Counties recognize that a number of short- and long-term questions about health reform remain unanswered and the uncertainty makes implementation challenging. These proposals carry risks for counties, too. Counties want to be sure that all options for Medicaid expansion are discussed and that the critical role of counties in delivering health services, including hospital and safety net services, is maintained."
Editor's note: This post has been updated with details from California's Secretary of Health and Human Services and other reactions to the governor's budget.