Sometimes an article can confuse rather than clarify the choices that California needs to make with regard to the Affordable Care Act. The Los Angeles Times story (“Costs mystery in state health goals“) on the state’s implementation of the Affordable Care Act neglects the substantial benefits of expanding Medi-Cal while wildly exaggerating the uncertainty of state costs.
* The article focuses on the potential costs of the Medi-Cal expansion without ever mentioning, much less quantifying, the benefits. It’s hard for anybody to evaluate those costs without detailing the benefit to Californians, our health system, our economy–and in savings back to the state budget.
* The article never mentions a specific number of Californians that would benefit from Medi-Cal expansion—the one mention is “hundreds of thousands” which is low (estimates are that around 1.4 million will be come eligible; since there are already 550,000 enrolled now in county-based Low-Income Health Programs “bridge” programs, we are likely to get over a million by 2014).
* The article never mentions the new federal funds available, or even that the newly-eligible are federally paid for. The article talks about the cost of 200-400K of the already eligible Californians that the state will pay 50% of the cost of health care for. But this neglects the nearly 1 million newly eligible where the federal government will pay 100% of the cost for three years–and 90-95% thereafter. There is no mention of the up to $4 billion/year in federal money that could come into our health system or economy. This provides context for the cost: It’s one thing to say that something costs hundreds of millions of dollars, it’s another to say that for the benefit of covering 1-2 million Californians we have to increase our Medi-Cal spending by 0-4%, and the federal govt will pick up over 90% of the costs. (That’s the conclusion of the KFF study cited in the article—but the article cherry-picks KFF’s numbers without mentioning that.) It’s context that is entirely missing.
* The thrust of the article is the “mystery” of the costs, which is totally overblown. There is always uncertainty in anything new, but there is a consensus of where the costs are that are in a specific range—as the Legislative Analyst’s Office says, low hundreds of millions of dollars a year.
* The cost is not in the billions. The article included a Schwarzenegger cost estimate, which is inflated by $2 billion for the cost of a provider rate increase–something that should happen, but that isn’t part of the expansion costs.
* These estimates don’t really talk about savings. The article mentioned “cuts” to statewide programs for breast cancer screenings, etc, without stating the obvious–that there are some natural savings (without cuts) that would occur if more of those Californians are covered comprehensively. There will be a debate about potential further cuts, or the debate with the counties about their obligations.
* Worse than accepting this premise, the article quotes the Brown Administration and a right-wing think tank, but the article doesn’t even include any opposing/dissenting voices on this question of cost uncertainty.
* It would have been useful context to indicate that the cost variability related to the Medi-Cal expansion is in line with the normal variation of the state budget, and of the Medi-Cal program—after all, the Medi-Cal program grew by over 1 million Californians in the last few years not because of any expansion, but because of the economy. The rolls are likely to go down by that amount as the economy improves.
So with a small state investment, California can bring up to $4 billion a year in new federal dollars into our struggling health care system and economy, while helping reduce our uninsured rate by one-half to two-thirds. The cited Kaiser Family Foundation study stated that the cost of the Medi-Cal expansion was only a 0-4% increase in state Medi-Cal costs.
By any calculation, the Medi-Cal expansion is a benefit and a bargain.
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