FROM THE FOUNDATION

All Over the Map

Newly updated to include breast cancer, prostate cancer, and spine procedures, this CHCF-sponsored research shows that practice patterns vary dramatically from place to place.

Medi-Cal Transforms

Medi-Cal is the main source of health insurance for one in five Californians. An updated report gives an overview of the program's key features, describes how the program is evolving, and examines the challenges ahead.

Obama Care in the Second Term

CHCF is a long-time sponsor of the UC Irvine Forecast Conference. A webcast of this year's conference on health policy in President Obama's second term is now available.

Medi-Cal

Thursday, September 15, 2011

Reform Law Challenges in Calif. Could Have Broader Implications

Although California has made progress in implementing the federal health reform law, the state is seeking to address budget issues by cutting health care funds and limiting services, the Los Angeles Times reports.

Background

Last October, former Gov. Arnold Schwarzenegger (R) made California the first state to create a health insurance exchange under the reform law. The exchange will be an online insurance marketplace for those who do not have employer-sponsored health coverage.

The Obama administration also approved a $10 billion plan to help the state get a head start on extending health coverage to low-income residents.

California's Challenges

Despite its progress on rolling out the reform law, California is thinning its health care safety net more aggressively than many other states, according to the Times.

California has faced a severe budget crisis, which prompted the state to seek $2 billion in cuts from Medi-Cal over the next two years. Medi-Cal is California's Medicaid program. The cuts could affect 8.5 million residents.

The state also is seeking Medi-Cal changes that would impose:

  • Copayments for prescription drugs, visits to physician offices and emergency departments, and hospital stays; and
  • Limits on how often beneficiaries can visit their physicians.

The Obama administration is expected to make a decision on the Medi-Cal adjustments this month.

Implications

Officials are concerned that allowing California to pare back its health care safety net could spur other states to follow suit.

Drew Altman, president and CEO of the Kaiser Family Foundation, said that the reform law is "badly in need of success stories, and early success in California could add decisive momentum."

He added that "if California bogs down, or if there is an implementation failure, it would be a huge negative for the whole implementation effort nationally."

Health care providers and patient advocates also have expressed concern that additional Medi-Cal cuts could further undermine the goals of the reform law (Levey, Los Angeles Times, 9/15).

Reader Comments:
  • 1
  • 09/15/2011
  • James Roache PharmD

In a meeting with Medi-Cal senior management over 5 years ago, I made the statement, "when you have a fixed amount of dollars to spend i.e. your budget, and you keep adding beneficiaries to the rolls, you have only three remaining choices to make, (1)reduce the number of units of supplies or services per beneficiary, (2) reduce the total number of covered codes provided and (3)seek partial payment from the beneficiary in the form of co-payments." At the time this statement was made, providers had already had their fees significantly reduced and the Department had already begun contracting with manufacturer's for reduced pricing on medical disposables and enteral products. Additionally, the Drug Manufacturer Rebate Program grew into billions of dollars of new revenue. It would seem to me the same choices remain valid today and expecting providers to continue to carry the burden for the State's out of control giveaway policies and unrealistic expectations must be curtailed now.



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