The New Health Dialogue

One challenge in implementing the health reform law at the state level is that the cost of the Medicaid expansion to the states depends greatly on the success of efforts to enroll people in the program. Recently, I looked at the range of costs for California, and examined what is driving that expected growth:

The California Budget Project estimates that the cost of the expansion to California will be approximately $5 billion dollars over the next ten years. California has to pick up only a small share of the cost of those newly eligible for the program. But the state will continue to split evenly with the feds the cost of those people who were eligible before the law was passed but will be newly enrolled. This is likely to be a very large number of people. ... The California Budget Project estimates that there will be about 500,000 new enrollees in Medi-Cal who were eligible before the law was passed. This is a result, in part, of the law’s streamlining eligibility criteria and processes. The law also provides funds for significant outreach, in particular through the actions of the California Health Benefit Exchange, the new state agency that will be the portal to coverage.[An estimated 1.5 million newly eligible are likely to enroll in expanded Medicaid by 2019.]

In this piece for HealthyCal.org, I pointed out that this does not necessarily have to mean higher taxes. States can do a lot to drive efficiencies in the program, and California took an important step in that direction with the renegotiation of its waiver for Medicaid financing signed last week:

This effort resulted in a plan to move some of the state’s highest-cost beneficiaries – seniors and persons with disabilities – into integrated care systems. Innovations in chronic disease management, palliative care, and in the use of “medical homes” also show promise and will be encouraged by provision in the federal health reform law.  The state also may be able to use its health care spending – in particular effective interventions in mental and behavioral health early in people’s lives – to create savings in the two other main areas of state spending: education and prisons. However, California’s system of budgeting by formula sometimes makes it difficult to actually capture savings that are created through good governing practices.

Regardless of financing, however, California and many other states have quite a bit of work to do to ensure that the provider networks - for both primary and specialty care - are adequate to serve people entering Medicaid. This is a vital component to making sure that the coverage expansion exists not only on paper but results in meaningful access to quality healthcare for newly covered Americans.