Health & Welfare | Daily Report

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Medi-Cal could cover as many as 10.5 million Californians by 2019 because of expanded eligibility and enrollment under federal health reform, according to a report released yesterday by an independent research group.

More than 7 million Californians are currently enrolled in Medi-Cal, the state's Medicaid program for low-income, non-elderly citizens and legal residents. The California Budget Project estimates the program will grow to about 8.5 million Californians by 2019.

In its report [PDF], the group projects that, beginning in 2014, the Affordable Care Act will make eligible more than 1 million Californians who were previously excluded from Medi-Cal. 

The law sets new income guidelines so that a Californian whose income is at or below 138 percent of the federal poverty level – $14,945 for an individual in 2010 – can enroll in Medi-Cal beginning in 2014. Low-income adults under 65 who have no children and are not disabled will also become eligible, the report said.

In addition, more than 500,000 people who were eligible before the new law but not enrolled, as well as more than 300,000 children absorbed from other public programs, will be eligible for Medi-Cal.

Federal funds will pay for the bulk of the program's expansion, which will cost an estimated $37.1 billion through the decade, according to the report. For every dollar the state pays toward Medi-Cal, it will receive more than $6 from the federal government.

From 2014 to 2016, federal funds will fully cover newly eligible adults enrolled in Medi-Cal. Federal payments will begin to shrink during the following years – to 90 percent of coverage costs by 2020 and thereafter.

Expanded coverage means more people will begin seeing doctors for regular care instead of delaying medical attention or seeking treatment at an emergency room – both of which can lead to higher health care costs.

"We're going to be getting a huge benefit – not just because we're getting a lot of federal money," said Hanh Kim Quach, a senior policy analyst at the California Budget Project and the report's author. "The savings for the state go far beyond what we're going to be getting from the federal government."

Still, the expansion of Medi-Cal does not entirely address how the program will maintain access and funding. California faces a doctor shortage, and the rate of physicians participating in Medi-Cal is low.

California doctors are less likely to have Medi-Cal patients (68 percent) than patients with private insurance (92 percent) or Medicare (78 percent), according to a recent study by the California HealthCare Foundation.

The study also found that among doctors accepting new patients, only 57 percent reported taking those with Medi-Cal. Overall, 80 percent of the state's Medi-Cal patients are cared for by 25 percent of its physicians.

Research shows that states with lower Medicaid reimbursement rates have lower physician participation in the programs.

"California ranks among the very lowest-paying states," the foundation said in its report. "For primary care services, California Medicaid reimbursement is only 51 percent of Medicare rates."

The new federal health law attempts to boost physician participation by chipping in for their reimbursement. For 2013 and 2014, the law will require states to pay doctors at Medicare rates for comparable primary care services, with the federal government covering the difference.

What will happen after this two-year period is "within the discretion of the state," the foundation said:

Even as (the Affordable Care Act) temporarily increases Medicaid payments to primary care physicians, it removes the ability of states to control their Medicaid costs by limiting eligibility. This may have the untoward effect of increasing the likelihood that states will reduce their payments … to all physicians beginning in 2015, as rate-reduction will be one of the few strategies remaining for states to lower their Medicaid expenditures.

Reducing Medi-Cal reimbursement rates would hamper patient access, Quach said.

Policymakers, she said, will have to "re-frame their thinking of the program so that it's not a leftover program to take care of people below 138 percent of the federal poverty line but that it's actual, legitimate coverage with full benefits."