Lingering recession fallout: Medicaid grows to cover nearly one third of Californians

Enrollment in California’s Medicaid program, Medi-Cal, is projected to grow in the new fiscal year that began July 1 to cover about 30 percent of the state’s population, with total enrollment expected to rise from 7.9 million before implementation of the Patient Protection and Affordable Care Act to 11.5 million in fiscal 2014-15, according to a summary of the budget.

The growing importance of Medi-Cal was highlighted in the release today of results of a California Field Poll of registered voters showing respondents assigning growing importance to Medi-Cal. Twenty-nine percent of voters surveyed rated the program as “very important” in a 2011 Field Poll; that number rose to 40 percent this year. “This is a safety net program (for the poor) that has now reached the masses,” noted Mark DiCamillo, senior vice president of the Field Research Corporation, calling the increase “very significant.”

The high percentage of Californians covered by Medicaid appears to coincide with the 2007-09 recession. As the downturn began to bite, data compiled by Kaiser Family Foundation show California having about the same percentage of its population in Medi-Cal in 2010 – 31 percent that year – and among the highest proportion of its population in Medicaid compared to other states. Only Maine and Vermont equaled California’s 31 percent in 2010 and those three states were exceeded only by the District of Columbia at 35 percent, according to the Kaiser Family Foundation. (Comparative year to year data are not available)

The growth in Medi-Cal spending all but wiped out an unanticipated surge in state tax revenues, the Ventura Star quoted Gov. Jerry Brown as saying. Consequently, Brown’s revised $107.8 billion general fund budget proposal contains little new spending beyond covering the additional costs of providing health care to 307,000 more low-income residents than anticipated when the 2014-15 budget was released in January, the newspaper reported. Another account appearing in The Sacramento Bee quoted Brown as saying California faces $1.2 billion in unanticipated costs in expanded Medi-Cal enrollment in the new fiscal year.

As Medi-Cal grew to cover 1 in 3 Californians in 2010 as tax revenues declined in the recession, the administration of then-Gov. Arnold Schwarzenegger bluntly declared the state could no longer afford to fund the program as it sought cost relief though program reductions and federal rule waivers. The heavy fiscal burden of program clearly continues to vex the current Brown administration. “As we are paying for this that will be at the expense of other government priorities,” said Health and Human Service Secretary Diana Dooley at today’s Sacramento briefing on the Field Poll results.

A final takeaway worth pondering: With more people being covered by Medicaid, might California and eventually the United States as a whole be moving toward the German “Kaiser system” where the government provides a safety net of basic health coverage for all?


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

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Frederick Pilot

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