Medi-Cal’s Very Big Decade

January 24, 2020

By Georgia Brewer

News Feed/Stories

Medi-Cal had a big decade.

The number of Californians enrolled in the state’s health insurance program for low-income residents swelled by 5.5 million from 2010 to 2019. It now covers 1 in 3 Californians and 40% of children.

The program’s annual budget — a combination of state and federal money — tops $100 billion, more than the entire state budget of Florida.

Kaiser Health News | By Harriet Blair Rowan | January 15, 2020

“Medi-Cal is the largest Medicaid program among all of the states,” said Dr. Andrew Bindman, a professor of medicine at the University of California-San Francisco who helped implement the Affordable Care Act as part of the Obama administration.

It’s most likely going to get bigger. On Friday, California Gov. Gavin Newsom released his 2020-21 state budget blueprint, which would boost Medi-Cal’s annual budget to more than $107 billion and expand coverage to even more people.

Medi-Cal, California’s version of the federal Medicaid program, was transformed in the past decade by federal and state laws — especially the federal Affordable Care Act — and by the ups and downs in California’s economy.

In early 2010, Medi-Cal covered 7.2 million people. Enrollment peaked at 13.7 million in March 2016, and slowly but steadily decreased to 12.8 million people in August 2019, according to the most recent enrollment data from the state Department of Health Care Services. About 4.9 million of them were under age 19.

In 2018, half of enrollees identified as Hispanic, 18% as white, 10% as Asian or Pacific Islander and 8% as black, according to the department. Thirteen percent of enrollees did not report their race/ethnicity.

The federal Affordable Care Act spurred the most significant changes to Medi-Cal since 2010, largely because it allowed states to broaden eligibility for their Medicaid programs to low-income people who had not previously qualified. Thirty-six states plus Washington, D.C., have adopted Medicaid expansions.

In California, Medi-Cal enrollment grew 78% from January 2010 to August 2019, primarily due to the expansion, which began in 2014.

“California went all-in on that,” Bindman said, and reduced its uninsured rate from 18.5% in 2010 to 7.2% in 2018.

Before the change, adults usually didn’t qualify unless they were parents with dependent children, pregnant or had certain conditions or disabilities.

Under the expansion, any adult who met the income guidelines could enroll, which represented a “radical shift” in the way the program operates, said Jen Flory, a policy advocate at the Western Center on Law & Poverty.

It transformed Medi-Cal “to more general low-income coverage,” she said.

The number of adults enrolled through the expansion has hovered around 3.7 million since mid-2016, while the rest of the Medi-Cal population dropped from 10 million to 9 million during the same period. Flory credited a strong economy and low unemployment in part, as more people got jobs that offered employer-based insurance and others surpassed the income limits to qualify.

But Flory and Bindman said other factors might be contributing.

They pointed to fears within immigrant communities over increased immigration enforcement, and policies such as the Trump administration’s “public charge” rule. The rule would allow immigration officials to more easily deny permanent residency status to those who depend on certain public benefits such as Medicaid.

Federal judges temporarily blocked the rule from taking effect in mid-October, but the Trump administration on Monday asked the U.S. Supreme Court to allow it to implement the rule while the legal battles continue.

As a result of such policies and proposals, they said, some immigrants may not be enrolling in Medicaid and other government programs, even if they are eligible.

In the past decade, Medi-Cal has also changed how it delivers care. In January 2010, roughly half of Medi-Cal enrollees participated in the traditional “fee-for-service” model, in which patients can see any doctor who accepts them, and providers are reimbursed for each medical service or visit.

The other half received care from managed-care plans. Under managed care, the state contracts with health plans to deliver benefits to enrollees and pays them a fixed monthly rate to cover the expense of doing so — a payment system known as “capitation.”

The percentage of enrollees served by managed care climbed to 82% by July 2019 as California, like many other states, looked to that model to save money.

The Trump administration and Republicans in Congress have weakened Obamacare and called for limits on federal spending on Medicaid. Such proposals may accelerate if Republicans retain the White House and regain control of the U.S. House of Representatives this year.

While the federal government moves to restrict funding and enrollment, California lawmakers continue to expand eligibility for Medi-Cal.

Starting this year, low-income young adults up to age 26 became eligible for full Medi-Cal benefits regardless of their immigration status, joining unauthorized immigrant children, who became eligible in 2016.

On Friday, Newsom proposed expanding full Medi-Cal benefits to eligible undocumented immigrant adults ages 65 and over as part of his state budget proposal.

California’s policies offer “a striking contrast to the policies of the current federal administration,” Bindman said.