April 2, 2013
One of the core components of federal health care reform is creating broader eligibility for Medicaid, a health care coverage program for low-income individuals that is jointly funded by the states and the federal government. Earlier today we released a new report that takes an in-depth look at Medi-Cal — the state’s Medicaid Program — as well as the central issues concerning its expansion in the coming years.
Expanding Horizons: Key Facts About the Medi-Cal Program as California Implements Health Care Reform looks at who is enrolled and the services they receive, explains how funding for Medi-Cal works, and discusses the major benefits of Medi-Cal expansion and the policy questions it raises. Read the report.
– Steven Bliss
December 21, 2012
California isn’t starting from square one as the state moves toward expanding Medi-Cal coverage to most low-income adults under age 65, pending approval in 2013 by state lawmakers and Governor Brown. Under a 2010 agreement with the federal government, California established a temporary, county-based Low Income Health Program (LIHP) that is building a bridge to an expanded Medi-Cal Program in 2014. LIHP provides health coverage to uninsured adults ages 19 to 64 who meet citizenship or immigration requirements and are excluded from Medi-Cal under current eligibility rules. The income of participating adults cannot exceed 200 percent of the federal poverty line (a limit equal to $22,340 for an individual in 2012), although counties generally may — and in many cases have — set lower eligibility thresholds. County participation in LIHP is voluntary; counties that opt into the program have half of their LIHP costs paid by the federal government. As of September 2012, more than 500,000 low-income Californians across 50 counties were enrolled in LIHP.
LIHP provides vital health care services to low-income adults who otherwise would be uninsured. It’s also bringing substantial federal dollars — projected to reach nearly $3 billion — into California’s health care sector and the broader state economy. But even more, LIHP is helping to prepare California for the expansion of Medi-Cal as envisioned in the federal health care reform law. This is because nearly all of the adults enrolled in LIHP — along with many other low-income Californians — would be newly eligible for Medi-Cal under the expansion. In fact, state officials are already planning for the transition of eligible LIHP enrollees to Medi-Cal effective January 1, 2014. At that point, the federal government will pay 100 percent of the cost of coverage for this new group of Medi-Cal beneficiaries through 2016, with the state picking up a small share of the cost in subsequent years. So, for anyone wondering when the Medi-Cal expansion will begin in California, LIHP provides an answer: It’s already under way. It’s now up to state policymakers to maintain the current momentum and propel the expansion — a key component of federal health care reform — across the finish line.
— Scott Graves
December 19, 2012
In January, the Legislature likely will begin considering how to implement a key component of the federal health care reform law in California: the expansion of Medicaid coverage to most people with incomes at or below 138 percent of the federal poverty line (an eligibility limit that currently is $15,415 per year for an individual). As we noted in a blog post last week, the vast majority of the cost of the expansion will be covered by the federal government, including 100 percent of the cost from 2014 to 2016. As a result, the expansion is likely to have a relatively minor impact on the state budget. This assessment is reinforced by a new report from the Kaiser Family Foundation. The report, authored by researchers from The Urban Institute, uses a rigorous study design to estimate the impact of boosting access to Medicaid — known as Medi-Cal in California — in all 50 states.
The cost to California of expanding Medi-Cal coverage is projected to account for less than 2 percent of total state Medi-Cal spending over the next 10 years. Specifically, the report projects that California is on track to spend about $375 billion on Medi-Cal between 2013 and 2022 — without taking the Medi-Cal expansion into account. Expanding Medi-Cal as envisioned in the federal Affordable Care Act would add only about $6 billion to the state’s costs over this 10-year period, equal to just 1.7 percent of total projected state Medi-Cal spending.
The study estimates that the state’s relatively modest $6 billion investment would allow an additional 1.9 million Californians to access affordable health care coverage through Medi-Cal in 2022 alone. In addition, the study projects that expanding Medi-Cal would bring nearly $69 billion in additional federal dollars — 11 times the state’s investment — into California’s health care sector and the broader state economy over the next decade. That’s quite a bang for the state’s health care buck.
— Scott Graves
December 14, 2012
Since President Obama signed the Affordable Care Act (ACA) in 2010, California has taken a number of steps to fulfill the promise of federal health care reform for the millions of Californians who lack access to affordable health coverage. With health care reform set to take full effect in 2014, the next big step is just around the corner: the expansion of Medi-Cal coverage to low-income adults under age 65 who currently are excluded from the program. This group includes nondisabled adults who don’t have children at home. It also includes parents who do have kids at home, but who lose access to Medi-Cal when their incomes rise more than a few percentage points above the federal poverty line – currently $19,090 for a family of three. Low-income adults under age 65 are much more likely than other Californians to lack health care coverage, as the following chart shows.
The ACA requires states to expand their Medicaid programs to cover most people with incomes at or below 138 percent of the poverty line – currently $15,415 per year for an individual or $26,344 for a family of three – beginning on January 1, 2014. The federal government will pay 100 percent of the cost of the expansion for the first three years, gradually reducing the federal share to 90 percent of the cost in 2020 and beyond. However, the Supreme Court’s landmark decision on the ACA this past June limited the federal government’s ability to compel states to implement the Medicaid expansion as envisioned in the health care reform law. As a result, some states wondered whether they could limit their expansion of Medicaid by setting a threshold below 138 percent of the poverty line and still expect the federal government to pay all of the cost from 2014 to 2016. This week, the Obama Administration provided an answer: No. As a result, a partial Medicaid expansion is not in the cards in the near term as health care reform continues to move forward in California and other states.
Governor Brown is expected to call a special session of the Legislature for early 2013 to address a number of remaining health care reform issues, potentially including the expansion of the Medi-Cal Program. We’ll have more to say about all of this in the weeks to come. But for now, it’s clear that expanding Medi-Cal can’t come soon enough for low-income adults who lack affordable health care options.
– Scott Graves
July 18, 2012
A little-known fact about the $91.3 billion state General Fund budget that took effect on July 1 is that it’s primarily a local budget, with the vast majority of state dollars flowing to local communities.
More than 70 cents out of every state dollar goes toward “local assistance.” This includes support for public schools and community colleges, financial aid for low-income college students, and cash assistance and services for low-income seniors and people with disabilities. Local assistance funding also goes to doctors who provide health care through the Medi-Cal Program, which serves millions of low-income children, parents, and seniors.
The other big category of state spending – accounting for more than 25 cents out of every state dollar – is known as “state operations.” Much of this funding also flows to local communities, including support for the 33 campuses of the California State University and the University of California, 33 state prisons, veterans services, state parks, and environmental protection.
State dollars play an important role in strengthening local economies and creating a high quality of life. So all Californians have a stake in our state budget and in helping ensure that our state’s finances are on solid footing.
– Scott Graves