Burgeoning enrollment in California’s Medicaid program raises tensions between administration, lawmakers over access to care, provider reimbursement rates

California Gov. Jerry Brown took a cautious approach on expanding Medicaid eligibility under the Patient Protection and Affordable Care Act. It was well into 2013 and not long before the start of the new fiscal year (July 1) and the October 1, 2013 launch of open enrollment in that state’s exchange marketplace, Covered California, before Brown approved legislation authorizing the Medicaid expansion. Even though the federal government would initially be covering most of the cost of the expansion, Brown was concerned about the overall growth of the state’s Medicaid program, Medi-Cal.

With good reason. Kim Belshé, who served as Health & Human Services Agency secretary in the previous administration of Gov. Arnold Schwarzenegger, warned in 2009 that even with a $10 billion infusion of supplemental federal cost share funding provided by the American Recovery and Reinvestment Act of 2009, “California cannot afford the Medicaid program as currently structured and governed by federal rules and requirements.” In other words, it’s a budget buster.

In 2013, Brown was at odds with his fellow Democrats in the Legislature who wanted to increase reimbursement rates paid to medical providers unhappy with low reimbursement rates. Since providers can opt not to accept Medi-Cal, they argued, it’s critical that they have sufficient incentive to do so to allow Medi-Cal enrollees adequate access to health care. Brown didn’t go along with boosting provider reimbursement rates that year, reasoning the state was still on the road to recovering its fiscal health after tax revenues were severely crimped in the 2008-09 recession.

Now two years later, Medi-Cal enrollment has jumped to more than 12 million, covering nearly 1 in 3 Californians and following the pattern seen in other states where Medicaid enrollments are outpacing by 2 to 1 sign ups for subsidized commercial health plans sold though state health benefit exchanges. The burgeoning enrollment has heightened the pre-existing tensions between Brown and legislative Democrats over increasing Medi-Cal provider reimbursement rates, as the Los Angeles Times reports in this story on two measures that would reverse the recession-era cuts in provider reimbursement rates.

As The Times reports, those tensions surfaced in this blunt exchange between the chair of the Senate Health Committee, Ed Hernandez (D-West Covina), and Jennifer Kent, director of the state Department of Health Care Services, at a hearing this week. Hernandez asked Kent to respond directly as to whether Medi-Cal patients have the same access to doctors as presumably more affluent Silicon Valley workers covered by commercial health plans.

“Yes or no?” he said.

“Yes,” Kent said.

“I don’t think so,” Hernandez replied.


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 fpilot@pilothealthstrategies.com or call 530-295-1473. 

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Frederick Pilot

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