How to Expand Medi-Cal? Assembly Weighs Gov. Brown's Two Proposals

By Scott Detrow

The Brown Administration has laid out two options for expanding Medi-Cal, California's health insurance program for the poor, and county governments don’t seem to like either one.

For decades, California’s counties have been charged with providing health care for people who fall through the health insurance cracks – that is, adults who earn too much money to be eligible for Medi-Cal coverage, but still can’t afford to buy insurance. So county governments have a lot at stake as California decides how to pay for the federal health care overhaul's Medicaid expansion.

Some context: the Affordable Care Act initially required states to expand their Medicaid rolls so that people who earn up to 138 percent of the federal poverty line (about $15,000) could qualify for coverage. The United States Supreme Court struck down the requirement, leaving it up to states to decide whether or not they wanted to expand Medicaid.

The Brown Administration supports expanding Medi-Cal, and has laid out two different options for doing so. Option one essentially expands the existing Medi-Cal system. Option two puts each of California's 58 counties in charge of the new coverage. That means counties, not the state, would have to pay for additional insurance costs once the federal government stops footing 100 percent of the bill in 2017.

Option One: The State Continues Running Medi-Cal

County officials’ main concern, voiced during a Wednesday Assembly budget hearing in Sacramento, is that Gov. Brown wants them to give something back as part of option one, if the state expands the existing system. “This option would require a discussion with the counties around the appropriate state and local relationship in the funding and delivery of health care,” Brown's budget summary states, “and what additional programs the counties should be responsible for if the state assumed the majority of health care costs.”

The Legislative Analyst’s Office estimates the state – or counties, under option two – would pay about $600 million of the health care costs in 2020, when the federal government foots 90 percent of the bill.

Still, the LAO estimates county-level savings would outweigh county-level costs for the next decade. But counties argue they’ll still be providing health care to the uninsured, even with a highly successful Medi-Cal expansion. Dr. Mitch Katz is the director of Los Angeles County Health Services. He told legislators two million uninsured people live in Los Angeles County. “We believe, if all goes well, one million [uninsured people] will newly gain insurance, and one million will remain residually uninsured.” He said Los Angeles County would spend $500 million providing health care under that scenario.

Option Two: Each County Runs Its Own Program

County officials aren’t too fond of Brown’s second option, either. Kelly Brooks-Lindsey with the California State Association of Counties said it would be a logistical challenge to put a system in place by the federal government’s January 1 deadline. “All 58 counties would have to have a low-income health expansion on the same day – January 1, 2014 – in order to draw down 100 percent federal match,” she said. “So if there was one county that couldn’t get their program up and running, it would delay the expansion in all 58 counties.”

And different counties have different systems. Some operate their own hospitals and clinics. Others pay private hospitals to care for poor patients. The federal government would also need to grant California a waiver, to make the county-level system happen.

Brooks-Lindsey said to meet their deadlines, counties need an answer soon -- especially if the governor and legislature opt for the more complex county-level option. “If we could get a framework by March, April, the sooner the better.”