State vs. County Showdown Over Funding the Medi-Cal Expansion?

We're now 354 days from the rollout of the Affordable Care Act next Jan. 1. While the governor declared the state's participation in the Medicaid expansion at his budget unveiling yesterday, he also proposed two ways to handle that expansion.

Under one scenario, the state will continue to administer the program. Under the other, each of California's 58 counties will oversee running Medi-Cal, California's version of Medicaid, for its own residents.

The Affordable Care Act dictates that the federal government will pay 100 percent of the cost for those people newly eligible for Medicaid, and in both proposals, the state's position is that California counties will get some fiscal relief once those federal dollars start flowing.

But don't get too excited, counties.

California Secretary of Health and Human Services Diana Dooley yesterday referred to a "conversation" around "appropriate sharing" that needs to happen between the state and its counties around financial responsibilities.

"Conversation" might prove to be a euphemism for what could become a vocal debate between the state and the counties. And maybe between counties themselves.

Alex Briscoe, Director of Alameda County's Health Care Services Agency, told me this morning that "sharing" presumes that current state funding is sufficient to meet the needs of the indigent poor, an idea he called "simply preposterous."

"There's an assumption we've been fully funded," he said. "That is simply not accurate."

Counties bear the responsibility for caring for poor uninsured adults, and Alameda is one of 55 California counties that has moved forward with implementing a Low Income Health Plan (LIHP), a bridge to the 2014 Medi-Cal expansion. About a half-million Californians are currently enrolled.

Bill Walker, Contra Costa County's Health Director, says he would support having county-level responsibility for overseeing the Medi-Cal expansion. "The devil is alwyas in the details win terms of agreements between the state and the county," he told KQED's Mina Kim yesterday. "And obviously at the end of the day, the question is what are the rates, what is the cost sharing, and how do the dollars flow?"

But whether the state or counties handle the Medi-Cal expansion, there will still be at least two million people who lack insurance, as Sarah Varney explained at Kaiser Health News:

Those residents, many of whom are undocumented and barred from buying their own insurance coverage through “Covered California,” the state’s online marketplace, and are ineligible for any public insurance programs, will continue to rely on county-run facilities and safety-net clinics.

If the state drains the counties of health care funding, says Anthony Wright, executive director of Health Access, an advocacy group, “You run the risk of losing public hospitals and clinics at exactly the moment we need all the capacity we can get.”

Later this month, the governor is expected to call for a special legislative session on health care issues.