Medi-Cal boom strains doctors and budgets

With Medicaid eligibility expanded nationwide under the Affordable Care Act, Medi-Cal enrollees have discovered that care in California is not keeping up with increased demand.

“Today, more than 12 million Californians, nearly one-third of the state’s total population, are enrolled in the government’s health insurance plan for low-income, disabled and disadvantaged residents,” U-T San Diego reported.

Wrangling reimbursements

The sharply increased burden has driven stark divides into statewide politics. The dispute has centered around reimbursement rates, which have fallen low enough to discourage many doctors from accepting Medi-Cal.

Even for those who do, low caps on Medi-Cal patients have become the norm. “According to the California Medical Association, Medi-Cal pays an average of $41.48 for an office visit, less than half the $102.45 that Medicare pays for the same service,” according to U-T San Diego.

Part of the problem traced back to 2011, when the state Legislature, deep in the red, passed Assembly Bill 97 — a bill cutting Medi-Cal reimbursements by 10 percent. As the San Jose Mercury News reported, a court injunction forestalled the cut until this fiscal year, but did not prevent it from staying in effect each year after that. In opposing the cut, Medi-Cal providers have been joined by the California Hospital Association and representatives in California’s rural counties, where doctors accepting Medi-Cal can be especially difficult to find without traveling long distances.

Gov. Brown’s administration has anticipated that the reimbursement cut will yield a first-year savings of over $214 million. But as state coffers have swelled with a big taxation windfall, Sacramento Democrats have pushed Brown to take a more liberal approach to budgeting.

For now, with the state deadline for budgeting looming, the governor’s office has refused to budge. Finance Department spokesman H.D. Palmer told the Mercury News that more specifics are needed on how reimbursement increases will expand access to care before the old rates are restored. Meanwhile, finance officials “have pointed out that the $91.3 billion Medi-Cal budget for 2015-16 is almost $10 billion more than the current fiscal year. More than half of the cost comes from the federal government, but the state increased its contribution from the general fund by $700 million for the next fiscal year, up to $18.2 billion.”

Competing priorities

Adding to the sense of chaos, activists have begun a new push to increase health care access for unlawful immigrants. That effort has come at an awkward time. As the Los Angeles Times observed, “reductions made in county health program funding to help finance Obamacare have made it more difficult for some local officials to add — and in some cases maintain — medical care for the poor and residents living here illegally.” California pulled about $900 million in funding for local health programs “to help pay for expanded insurance coverage for those eligible to receive Medi-Cal,” according to the Times.

Lawmakers have also targeted another way Gov. Brown has clawed back some health care outlays. In a unanimous vote, the state Senate sent legislation to the Assembly that would crack down on California’s so-called Medi-Cal recovery program. That regulatory approach that allows the state to reclaim Medi-Cal money from the estates of deceased beneficiaries, even going after the value of their homes. Under the law governing Medicaid, the federal government has been authorized to recover funds in a more narrow way.

For many Californians affected by the rules, the takings come as an shock. As Emily Bazar noted at the Sacramento Bee, beneficiaries can be targeted even if they never went to a doctor. In a particularly counter-intuitive twist, Obamacare enrollees placed into Medi-Cal based on their low income will be required to pay back their health subsidies — while higher-income Covered California enrollees will not have to repay the ones they receive.