How Obamacare Could Change Medi-Cal For the Better (and Worse)

by Dan Diamond, California Healthline Contributing Editor

TOPIC ALERT:

As many as 1.5 million Californians are expected to gain Medi-Cal coverage over the next six years, thanks to provisions in the Affordable Care Act.

That might be the easy part.

What's tricky: Making sure that the already-strapped Medicaid program -- which is facing a controversial 10% provider rate cut -- has enough dollars to go around.

"Expansion of Medicaid in California is a step in the right direction," Paul Phinney, president of the California Medical Association, said in a statement last week.

"However, without restoring the proposed rate cut to the California system," he added, "ACA in California may be nothing more than an empty promise with an insurance card."

Program Overview

Phinney's comment hints at the duality around the Medi-Cal program, which is either incredibly healthy or on life support, depending on your perspective.

On the one hand, it's the largest state Medicaid program in the nation, covering nearly eight million Californians -- approximately one-fifth of the Golden State's population.

On the other, the program's lowest-in-the-nation federal match rate and 47th lowest provider reimbursement rates have created ongoing access pressures, and doctors are warning that they'll turn away even more Medi-Cal patients if the pending rate cuts go through.

Still, the cash -- and coverage -- infusion from the Affordable Care Act could do a lot of good for California and the Medi-Cal program itself, experts conclude. Here's a quick review of some of those positives and areas of concern.

Positive: Federal funds would generally pick up the tab

A study released earlier this year by the UC-Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research found that California's share of Medi-Cal expansion costs would be relatively small; federal dollars would account for at least 85% of the total costs of the eligibility expansion and increased take-up among those eligible but not enrolled through 2019.

Positive: Medi-Cal primary care providers are seeing temporary pay hike

Given the current low payment rates, the ACA's two-year boost in payments for PCPs has an outsized effect for California providers, the Kaiser Family Foundation reports: Qualified physicians in the state will see a 136% jump in their fees.

Positive: Downstream boost for employment, outcomes

The trickle-down impact of coverage expansion will help create nearly 100,000 jobs in California next year, according to a Bay Area Council analysis conducted by Jon Haveman and Micah Weinberg.

Specifically, one of the potential positives of the Affordable Care Act is that its effects on health sector spending can circulate through the broader economy, Weinberg told "Road to Reform" last year.

Other experts have noted that expanding health coverage has been linked to improvements in educational outcomes, worker productivity and preventive care.

Concern: Pending pay cut could further tighten program

A broad coalition of groups, including CMA, the Service Employees International Union and health plans, are fighting to repeal the planned 10% cut to provider payments.

Writing at Capitol Desk, California Healthline's David Gorn on Monday examined how some lawmakers are having second thoughts about the cut.

"Now that the California economy is a little better off than it was two years ago, legislators may be changing their minds about the wisdom" of their two-year-old plan to cut rates, Gorn writes.

Concern: Lack of access plagues program

But that rate cut aside, a number of organizations have warned that Medi-Cal doesn't have capacity to absorb its newest beneficiaries.

"While the state prepares to enroll as many as 1.4 million additional Californians in the Medi-Cal program, many health care providers can no longer afford to serve these patients," according to Carmella Gutierrez, president of Sacramento-based Californians for Patient Care.

Emily Bazar at the California HealthCare Foundation's Center for Health Reporting has been tracking the intersection of ACA implementation and Californians' health care through her "Ask Emily" column. (CHCF is the publisher of California Healthline.)
So "Road to Reform" decided to Ask Emily: Are those Medi-Cal access concerns justified?

Absolutely, she says.

"Although state officials are adamant that access to the program is adequate, there are parts of the state where Medi-Cal beneficiaries struggle to find care," according to Bazar.

"One Bakersfield pediatrician who accepts Medi-Cal is beyond capacity, and says no to 25 or 30 callers each day who are trying to find a Medi-Cal provider," she adds.

Weekly Roundup

Here's a quick look at what else is happening around the nation.

Medicaid as unlikely cost-saver: Supporters of the Medicaid expansion in Ohio are arguing that opting into the ACA's coverage expansion would lower taxpayer spending on various social services, like drug courts.

All of this has happened before; all of this will happen again. Writing at the Washington Post's "Wonkblog," Sarah Kliff details how the concerns raised by critics of Medicare in the mid-1960s parallel similar arguments against the Affordable Care Act today.

Wells Shoemaker
The crucial challenge will be granting access to systems with coordinated care capabilities, ongoing QI activities with a population focus, cultural aptitude, and accountability for performance. Dr. Phinney is right. Disaggregated "access" is not much better than what is available to all Californians now--reliable ER care and sketchy access to continuous healing relationships. This takes investment in young systems, workforce development, and intelligently aligned payment, and that can't be subject to political vagaries year to year.

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