As part of the budget agreement, many legislators supported Assembly Bill 7 (Centralized Enrollment for Public Social Services) and the governor enthusiastically signed it into law. Who could be against saving the state millions of dollars by streamlining and automating the process for applying for public social services like Medi-Cal, food stamps, and the temporary assistance to low income families known as CalWORKS? In addition to promising lower costs for the state, the law was heralded as promoting greater efficiency in the application process, more consistency in the eligibility decisions from county to county, and increasing access to these programs for eligible people by making better use of technology.
But hold on… are those claims really true? As the state begins this week to implement this law, the picture is much clearer. Advocates have looked at the experiences in several other large and medium-sized states that have tried to implement similar so-called “reforms.”
The results in these states give California a preview of what we can actually expect: significantly increased costs to the program, less access to benefits especially by seniors and people with disabilities, and substantial loss of health insurance and benefits by eligible people currently enrolled in programs because of new barriers and confusing systems.
Here is what we know now:
Although the new system is advertised as saving California as much as $500 million a year, these savings are not considered likely as a result of these changes. The Administration has failed to factor in the very real start-up costs, the price of new technology, nor evaluated the risk that California may lose the significant reimbursement we currently receive from the federal government utilizing our current application processes.
Other states who have embarked on similar reforms as California have actually incurred increased costs for “contracting out” the application process. Texas, Indiana, Ohio, Wisconsin, and the District of Columbia, among others who have tried to implement a computer-driven application process, have not seen any savings. Instead, they have spent millions of dollars in new contracts, hardware, software, training, and public education campaigns that ultimately were not successful. These states had to respond to these disastrous results by abandoning their “reform” efforts altogether, cancelling expensive contractual arrangements, reconstructing the county and state systems they had just dismantled at great cost, conducting investigations of private contractors, all the while being the subject of scathing reviews by the press and government watchdog organizations. The failures in those states were characterized by independent reviewers as full of “cost overruns and overcharges,” “wasted tax dollars, “and “profiteering at taxpayers’ expense.”
Other states who have tried to move toward a centralized, privatized internet application for public programs have not achieved increased access or better quality and consistency in determinations of eligibility. They have found that too many vulnerable individuals do not have access to the Internet or the capability to use an automated application process. Those states found that they could not achieve significant costs savings by closing county offices. They realized that local in-person access to application assistance remained essential to the viability of their assistance programs and computerized applications should remain an alternative, but not the only way to apply.
Much of the frustration with complex programs such as Medi-Cal should be focused on simplifying the rules for eligibility, not creating barriers by imposing technology. This change is likely to discourage eligible people from applying for public programs without making needed changes to simplify the program rules.
The language in the law calls for a Stakeholders’ Advisory Committee to work with the administration to streamline implementation, keep costs under control, and increase genuine access to public programs. Health Access is committed to working to improve this process and achieve better results with a broad coalition of organizations who serve seniors, people with disabilities, children, labor, low- income families, and others. We will work collectively to ensure that this change brings genuine improvements to the process and does not spend money frivolously on technology that enriches consultants without adding value to consumers and taxpayers.
Stay tuned for developments as this process unfolds.