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May 8, 2013
Editorial: Big issues await California in prepping for health reform

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(May 8 -- By the Editorial Board)

We have fewer than five months until the October enrollment launch when uninsured Californians will be able to apply for coverage through the state.

Depending on their income, uninsured individuals can either buy insurance in the state's exchange, called "Covered California," or get coverage from expanded Medi-Cal, the joint state-federal insurance plan for lower-income people.

Yet some big issues remain unresolved. The state needs to decide them quickly so providers, insurers, community groups, state agencies and counties can prepare for the October enrollment period, with insurance coverage to begin in January.

Medi-Cal expansion

In his January budget proposal, Gov. Jerry Brown was undecided between a state-based approach or a county-based approach, and he is not tipping his hand until Tuesday, when he presents his May budget revision - very late in the game.

A county-by-county piecemeal approach makes no sense. The Legislative Analyst's Office recommends that the Legislature adopt a state-based Medi-Cal expansion to match existing statewide Medi-Cal benefit packages, provider networks and provider rates. Get this done and signed, pronto.

Remaining uninsured

The state estimates that half of the uninsured will sign up for insurance in the exchange or through Medi-Cal. But some 3 million to 4 million will remain uninsured - 3 million citizens, plus 1 million noncitizens who are not eligible for coverage.

What to do about the remaining uninsured? Counties historically have taken care of the medically indigent, and receive some money from the state for that - about $700 million this year. Since about half would become insured, Brown indicated in his January budget that he wanted to "capture" the county savings to pay the state's costs for Medi-Cal expansion.

The counties point out, rightly, that the federal government covers 100 percent of the cost of the Medi-Cal expansion for 2014, 2015 and 2016.

They argue that during this three-year transition period, they will continue to cover the remaining uninsured and need to ramp up to enroll those eligible for Medi-Cal and the exchange.

Brown should heed their concern. But he should not issue the counties a blank check. Dollars should be distributed by actual numbers of the remaining uninsured cared for by the county safety net. And that care should provide a "medical home," with preventive and primary care - as counties have built up with the existing Low- Income Health Program - to avoid expensive crisis care.

In future years, when the numbers of the remaining uninsured go down and the state will be responsible for some of the cost of expanded Medi-Cal - 5 percent in 2017, 6 percent in 2018, 7 percent in 2019 and 10 percent after that - the state should capture the county savings to pay for Medi-Cal expansion costs.

Further realignment

Brown is big on realignment. He won passage of public safety realignment, shifting responsibility for certain nonviolent offenders from state prison and parole to county jail and probation starting in October 2011. In his January budget, he indicated that if the state takes on the Medi-Cal expansion, he wants the counties to take on more realignment - "assume programmatic and fiscal responsibility for various human services programs, including subsidized child care."

The LAO says that given the multitude of issues the Legislature faces with health coverage alone, the state should "avoid introducing additional issues - such as complicated shifts of authority over unrelated programs." Brown should give this a break.

California has plenty to do to get the Medi-Cal expansion and the state health exchange going in time for the October open enrollment period. The governor and Legislature should focus like a laser on that - and get it done by June 15.

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