Myths and facts on Medi-Cal eligibility processing

Health advocates are all for streamlining our bureaucracy, especially the enrollment and retention procedures that allow people to get the health and human services they need. Health Access California has sponsored and supported legislation on the subject. Some of these efforts have succeeded, others have been defeated–largely because they would actually allow more people to get on to the programs they are eligible for, costing more money.

What the Governor is proposing in this latest round of talks is different–these aren’t efforts to streamline the programs, but that could very well make it harder to get on these programs in the first place. There are some useful reforms–and some of them are already underway.

From the County Welfare Directors Association and the California State Association of Counties, here’s some facts to rebut the Governor’s case for stalling the budget to deal with “reforms” in processing those seeking Medi-Cal coverage and other services.

Myth: The current eligibility process for Medi-Cal is “pen-and-paper” and handled by 27,000 workers “scattered” throughout the state’s 58 counties. (Op Ed, 7/3/09)


· After 20 years of repeated and failed attempts by the State to bring automation to the Medi-Cal, CalWORKs and Food Stamps programs, California counties successfully developed and implemented automation in all 58 counties.

· Counties and the state are already working to use technology to streamline application for programs. For example, individuals can already apply for Food Stamps online in five counties, expanding to all counties over the next year. Concurrently, on-line integrated access to Medi-Cal, CalWORKs, and the County Medical Services Program (CMSP) will be added for 39 counties. Counties will continue to add on-line services as funding permits.

· Counties and the Administration are working on a project to allow on-line application for a whole variety of health and human services programs. The Governor curiously fails to acknowledge this fact in his OpEd.

· The staffing number used by the Governor includes not just eligibility, but also employment services workers who help people move from welfare to work.

Myth: Centralizing and modernizing eligibility would save $500 million a year. (Op Ed, 7/3/09)


· The savings figures are overstated, as they have been every time this proposal or a variant of it has been put forth, and an accounting of the upfront costs and likely actual savings of this proposal has never been provided.

Ø Eligibility costs are driven by complex program rules, not the counties.

Ø The Administration’s math assumes that Medi-Cal, Food Stamps, and CalWORKs can be compared to the Healthy Families program, which is a nonsensical, apples-to-oranges comparison.

Ø The Governor’s proposal would substantially add the budget deficit, as it would duplicate existing automation and would likely not be eligible for federal funding.

· Based on the experiences of other states, these savings will not materialize.

Ø Projects in Texas, Indiana, Wisconsin, Ohio, and the District of Columbia, to name a few, provide recent examples of cost overruns and overcharges across multiple human services programs.

Ø In Texas alone, the state was promised $600 million in savings that never materialized. The Texas Comptroller advised the Legislature that “this project has failed the state and the citizens it was designed to serve” and called the plan a “perfect story of wasted tax dollars, reduced access to services and profiteering at taxpayers’ expense.”

· California spends less than other states to administer these programs. The most recent federal claims data shows that California’s Medicaid administrative cost per recipient is well below Pennsylvania and Tennessee, and is right in line with Illinois and New York.

Myth: The programs being considered for centralized, privatized eligibility are fraught with errors.


The State is not penalized for Medi-Cal errors, and the current error rate is low. Food Stamp error rates have been low for a number of years following collaborative efforts between the state and counties to reduce errors. The state actually received bonuses from the USDA in recent years based on its improved Food Stamp performance. There is no national error rate for CalWORKs, but a recent review of a sample of states found California to make fewer errors than the other large states that were studied.

Myth: Centralizing and privatized eligibility is good for clients and will improve customer service.


· There is no evidence that centralized, privatized eligibility improves customer service, which is why every major client advocacy organization has come out in opposition to the proposal. In fact, the results in other states show worse customer service. In just the first four months of the Texas project, more than 100,000 children lost their health coverage. In Indiana, the most recent example of failed privatization, major media outlets and many legislators have called for a halt to the process and the state has responded by voluntarily stopping implementation in a majority of counties.

· Failed privatization continues to harm clients. After Texas terminated its contract with the Texas Access Alliance, it had difficulty staffing back up to meet demand, with people seeking benefits bearing the brunt of the problem. Offices were understaffed and calls went unanswered, leading the Fort Worth Star-Telegram to conclude “the ringing phones are fallout from a major experiment in state government that nearly everyone involved calls a disaster.”

Health Access California promotes quality, affordable health care for all Californians.

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