The proposed U.S. Senate health care bill could add $114.6 billion to the cost to Medi-Cal in California, potentially leading to dramatic changes to the program that provides health services to nearly half the people in the central San Joaquin Valley, officials said Wednesday.
“Under this bill, we’d be faced with very difficult choices of how to operate the Medi-Cal program going forward,” said Mari Cantwell, the state’s director for the program.
Senators have postponed voting on the bill until after the Fourth of July recess. The bill to repeal and replace the Affordable Care Act would pay states a fixed amount for Medicaid, rather than reimbursing them for a share of expenses.
California’s two Democractic Senators, Dianne Feinstein and Kamala Harris, oppose the bill.
California officials said an analysis of the Senate bill by the state Department of Health Care Services and the Department of Finance showed it would add nearly $3 billion in costs in 2020, with an annual cost growing to $30.3 billion by 2027. They estimated a total cost from 2020 through 2027 would total $114.6 billion.
Jennifer Kent, director of the California Department of Health Care Services, said the state has significant concerns for the future of Medi-Cal. “You would essentially have to restructure your entire program,” she said.
Medi-Cal provides coverage to 13.5 million low-income children and adults in California. About 2 million residents, half the population from Kern to San Joaquin counties, depend on Medi-Cal to pay for doctor visits, operations, prescription drugs and laboratory tests and nursing home care. In Fresno County, 279,961 people are enrolled in the program.
The Affordable Care Act added about 3.8 million Californians to Medi-Cal under an expansion of the program. About 116,000 people were added in Fresno County. State officials said the Better Care Reconciliation Act would quintuple the state’s costs for the program.
Delfino Neira, director of Fresno County’s department of social services, said the bill could create a massive cost shift to the county.
Currently, the federal government provides 50 percent of the funding, and the state the other half for the administration of Medi-Cal. It costs $71 million a year to administer the program in Fresno County.
If the state shifted some of the administrative costs to Fresno County, “it’s going to be a devastating effect,” Neira said.
The state estimates the effect on California’s general fund would be $92.4 billion in 2027.
A reduction in federal funds of the magnitude that the state has projected would be difficult for the state and county to absorb, Neira said. “It’s just a shifting of the cost to other people rather than the federal government. But the need is still there.”
Costs would have to be controlled by cutting eligibility, services or reimbursement to providers, Neira said. In the end, he said. “there would be less people getting health-care coverage and they would go back to the traditional ER only services.”
On Wednesday, the Latino Coalition for a Healthy California and a coalition of health care advocates held a news conference in northwest Fresno to discuss the Senate bill and their concerns about the potential for millions to lose health care coverage in the Valley.
“The Senate bill is a harmful bill,” said Noe Paramo of the California Rural Legal Assistance Foundation. “It’s a mean-spirited . We need a heartful bill and that’s the Affordable Care Act.”
If Obamacare is repealed, millions could lose Medi-Cal coverage
This was posted Dec. 9, 2016
How health care is delivered to half the people in the San Joaquin Valley could be decided by a repeal of the Affordable Care Act.
President-elect Donald Trump and the Republican-led Congress want to replace Obamacare and reduce health care spending. And Medicaid – known as Medi-Cal in California – is entwined in that discussion.
A lot is at stake for Valley residents: About 2 million residents, half the population from Kern to San Joaquin counties, depend on Medi-Cal to pay for doctor visits, operations, prescription drugs and laboratory tests.
Medi-Cal officials won’t speculate on potential changes to the health insurance program that pays for a variety of medical services for people with low incomes, the elderly and disabled. But doctors, clinic operators – and patients – are nervous about the program’s fate.
“I have huge concerns,” said Barbara Phillips, 57, of Fowler. “I don’t even like to think about it, because it’s so scary.”
I don’t even like to think about it, because it’s so scary.
Barbara Phillips, Medi-Cal recipient
Medi-Cal has paid for doctor visits and medication to control the chronic psoriasis Phillips developed two years ago. She also has needed a breast biopsy and a scan of her bladder. “I don’t know what these bills cost, but I know I couldn’t pay for them,” she said. Phillips works as a caregiver. Her income can fluctuate, but she typically earns about $10,000 a year.
Phillips enrolled in Medi-Cal in 2014, when California expanded the program under the Affordable Care Act to include low-income adults who previously had not been eligible. California has added some 3.7 million residents to Medi-Cal under the expansion. Fresno County enrolled about 117,000 residents.
Medi-Cal is definitely a lifeline for those who otherwise wouldn’t have access to health care, said Sandra Celedon-Castro, manager of Fresno Building Healthy Communities.
California has made great progress in getting people insurance coverage, and the concern is that changes to Medi-Cal could unravel those gains, Celedon-Castro said.
The program often is the largest insurer in a community. A recent report by the California Budget & Policy Center found that in seven Valley counties more than 40 percent of the population was enrolled in Medi-Cal. The highest was Tulare County, with 55 percent, followed by Merced County at 51.5 percent. Fresno County had 49.9 percent, Madera had 45.3, Kern had 45.1, Stanislaus had 44.5 and San Joaquin, 40.9.
Far more Californians have been enrolled in Medi-Cal through the Affordable Care Act than have bought private insurance plans through Covered California, the state’s health insurance exchange established under the federal health law.
About 2 million Californians have bought private insurance through the exchange, compared to the 3.7 million enrolled in Medi-Cal. From Kern to San Joaquin County, about 125,000 people have bought insurance plans, compared to about 400,000 who have been enrolled in Medi-Cal under the expansion.
At United Health Centers of the San Joaquin Valley, which has federally qualified health centers in 10 cities from Parlier to Mendota, most of the patients have very low incomes and qualify for Medi-Cal.
Before the Medi-Cal expansion under the Affordable Care Act, about 60 percent of patients were enrolled in Medi-Cal, said Justin Preas, deputy chief executive officer. Now, about 70 percent are on Medi-Cal.
The Medi-Cal expansion has been a “huge victory for patients,” he said.
United’s chief medical officer, Dr. Robert Shankerman, agreed. Patients are able to get screenings and preventive services – a mammogram, pap smear, colonoscopy – that they could not afford before being enrolled in Medi-Cal.
“I’ve had at least one patient with colon cancer that probably would not have been diagnosed without insurance,” Shankerman said.
But the Medi-Cal expansion could be dismantled as part of the repeal of Obamacare.
Money at stake
Besides the potential to disrupt health care for 3.7 million Californians, health policy experts say the state could lose $15 billion in federal funding for the Medi-Cal expansion if the Affordable Care Act is repealed.
Financing for the expansion comes from state and federal funding, but most of the funds are federal. The budget for the expansion for fiscal year 2016-17 is $16.17 billion. Of that amount, the state paid only $819.5 million in general fund dollars. The total Medi-Cal budget for children, adults, the elderly and disabled – nearly 14 million people – is $93 billion, of which California contributes $18 billion from the general fund. (By comparison, the 2016-17 budget for K-12 schools in California is $71.6 billion).
It’s unclear how federal funding for Medicaid programs could be allocated to states under a repeal and replacement of the Affordable Care Act. But an option to contain health care spending that has some traction with congressional Republicans is the bundling of federal Medicaid dollars into block grants. This would cap the federal funding that a state would receive. Currently, the federal government agrees to a matching amount based on what a state spends on Medicaid.
It’s expected that block grants could cut the federal government’s Medicaid spending nationwide by a trillion dollars over 10 years, said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, a Washington, D.C.-based nonpartisan research and policy institute.
It’s difficult to predict how much California would get in a bundled payment, but block grants put states on the hook for the cost of any increased enrollment or any increased health costs, said Anthony Wright, executive director of Health Access California.
Plans for curtailing Medicaid spending through block grants have been made in the past, including an attempt by President George W. Bush in 2003, Wright said. But efforts to cap Medicaid spending have not been popular with state leaders and were stopped, he said.
“A cap would put all of those governors and state legislatures in a tough bind and so there was a lot of resistance for that exact reason,” Wright said.
This time around, however, could be different. Congressional leaders have expressed interest in Medicaid block grants, and Trump supported the idea during his campaign.
If states receive reduced federal funding to support Medicaid, patients could feel the effects, Park said. States likely would react by cutting eligibility and optional benefits, he said. “States could have waiting lists or enrollment caps.”
Or they could charge Medi-Cal recipients a monthly premium and require copayments for services, he said.
But Wright said charging premiums and collecting small payments of even a few dollars for copays has a dampening effect on enrollment in the insurance program. Plus, he said: “Our studies in California and elsewhere showed in fact that collecting these copayments and premiums are actually more costly than any amount that you collect.”
About 2 million residents, about half the population from Kern to San Joaquin counties, have Medi-Cal.
Not everyone, however, is opposed to paying a small fee for services.
Phillips said she would be willing to pay something for her care. “I’m not asking for everything completely free.”
She said she understands why some people want to repeal the Affordable Care Act, in part because it has made insurance premiums more expensive for people who have private insurance plans.
For example, her daughter has higher insurance costs, she said. “It kind of messed it up for people who had existing insurance, but it’s a gain for someone like me. I never had insurance because I couldn’t afford it.”
Dr. J. Luis Bautista, a primary care doctor in Fresno, said the expansion of Medi-Cal hasn’t been a health panacea. In particular, it has not solved the problem of access to specialists.
“We have to come up with a better program,” he said.
Lindsay Mann, chief executive officer at the Kaweah Delta Health Care District in Visalia, said it’s too soon to guess about changes to Medi-Cal that might come from a repeal of Obamacare, but he is concerned about hospitals facing higher uncompensated costs if patients lose Medi-Cal coverage.
“If the Affordable Care Act has done anything, it’s provided more access to primary care, preventive care and funded care that otherwise would be provided on an uncompensated care basis,” Mann said.
Call to action
Wright of Health Access California said congressional representatives in the Valley “need to take a hard look to see if they can cut a Medicaid program that covers nearly half of their constituents.”
“Whether it’s the (House) majority leader in Kern or the other representatives up and down the Valley, they need to look at how these proposals would impact the health systems in their district,” Wright said.
Kevin McCarthy, the House majority leader from Bakersfield, did not respond to requests for a comment about potential changes to Medi-Cal, which provides health services for 45 percent of Kern County’s population.
I had over 80,000 individuals in my district six years ago who had no health care insurance and today almost 50,000 of them do.
Rep. Jim Costa, D-Fresno
But in excerpts of media interviews that have been transcribed on his website, McCarthy said that after repealing Obamacare “you want to make sure you replace it right.” And he said he planned to send letters to all the governors and insurance commissioners asking for their ideas for a replacement.
Devin Nunes, R-Tulare, wrote in an email response: “A large percentage of the population still has no health care coverage at all, and those people are a major focus of the Republican House proposal for an alternative to Obamacare – it aims to make coverage available to everyone who wants it, without a mandate.”
Jim Costa, D-Fresno, said there have been no details about a replacement for Obamacare so he can’t say how Medi-Cal will be affected – but he is fairly sure there will be changes.
And he is concerned.
“I had over 80,000 individuals in my district six years ago who had no health care insurance and today almost 50,000 of them do.”
Costa hopes Congress will take time to assess what is working and what is not, and come up with a real solution for the health care system. He tells his constituents: “I’m going to try and maintain the gains that have been made and the cost savings that have been realized.”
Phillips hopes lawmakers won’t take Medi-Cal away from people who must rely on the coverage. “How do people like us, who have chronic illnesses – how would we be able to take care of ourselves?”
And she is grateful that she still is able to use Medi-Cal. “Even to this day, I can’t believe I have Medi-Cal. It just completely blows me away. I think how fortunate it is that I have that because of the things I’ve had to deal with for my health.”