Study: Reform Law To Expand Coverage, Hike State Spending

The federal health reform law will help about six million uninsured Californians obtain health insurance by 2016, but it also will increase overall state spending by 7%, according to a new RAND study, the Sacramento Business Journal reports.

The study, sponsored by the Council of State Governments, also examined how the law will affect Connecticut, Illinois, Montana and Texas (Robertson, Sacramento Business Journal, 4/5).

Researchers predicted that the percentage of uninsured residents would decline significantly in all five states and that state spending would rise in all of the states except Connecticut (Manos, Healthcare Finance News, 4/5).

Connecticut is an exception because some low-income individuals covered under a state-administered insurance plan will become newly eligible for Medicaid under the overhaul. The federal government is covering a substantial portion of the costs for newly eligible Medicaid enrollees (RAND report, 4/5).

California-Specific Findings

The RAND report also found that:

  • The proportion of California residents with health insurance will increase from 80% today to 96% by 2016;
  • The number of uninsured Californians will decrease from 7.5 million today to 1.6 million by 2016;
  • Enrollment in Medi-Cal, California's Medicaid program, will increase by 58% by 2016;
  • About 17% of nonelderly California residents will receive coverage through the state health insurance exchange by 2016; and
  • The reform law will increase state spending by $2 billion annually by 2016 and by $4 billion annually by 2020.

Reasons for Changes in Coverage, Spending

Researchers said the reform law will increase access to health insurance because Californians will be able to obtain coverage through the state health insurance exchange and the forthcoming expansion of Medi-Cal.

They also noted that the Medi-Cal expansion would contribute to the predicted higher levels of state spending (Sacramento Business Journal, 4/5).

James Roache PharmD
Wow, and the numbers keep rising. In November 2010, then Secretary Belshe' estimated an addition of only 4 million by 2014, now its 6 million by 2016!! Folks, this will now put the number of card carrying Medi-Cal recipients in 2016 (only 5 years from now) to over 14,000,000, in a state of less than 38,0000,000. (RAND states a 58% increase by 2016) With a current budget deficit of 26 billion and cuts being proposed to, of all programs, Medi-Cal, RAND further estimates an additional $2,000,000,000 in new expenses. Is anyone willing to venture a guess who is paying for all of this? Literally, less than two working Californian's will be paying the full load of each and every Medi-Cal beneficiary. The numbers don't lie. Is anyone up there in Sacramento really looking at these facts and does any one comprehend what a house of cards this is creating for our once great State? It will make the fiscal problems of 2011 seem trivial.
Stephen Mlawsky
Stop covering undocumented people in California and end the problem

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