California To Pay About $1.3 Billion For Medicaid Expansion In First Year Of State Contributions | California Healthline

The senate is debating a new American Health Care Act (AHCA) as time ticks on.  Meanwhile many provisions  of the ACA continue to unfold.

For example the State of California is preparing to pay $ 1.3 billion to underwrite Medicaid (Medi-Cal), a new expenditure that will further strain an already burdened health care budget.

By  Emily Bazar

This year marks the first time states that expanded Medicaid under the Affordable Care Act will have to pitch in to help fund their expansion of the program. Their share of the overall price tag compared with federal contributions is small — 5 percent of the cost to cover newly eligible enrollees — but that still equates to real money in the Golden State.

That’s because the expansion of Medi-Cal, California’s version of the federal Medicaid program for low-income residents, has added nearly 4 million additional enrollees, according to the state Department of Health Care Services (DHCS). Most other states don’t have that many enrollees in their entire Medicaid programs.

“It was expected, but it’s still money that has to come from somewhere,” said Stan Rosenstein, a health care consultant in Sacramento who ended his 31-year career at Medi-Cal in 2008 as the state Medicaid director. “It puts budget strain on the state.”

In California, the potential loss of federal dollars caused by a rollback of the Medi-Cal expansion would be massive. The state Legislative Analyst’s Office estimated in February that the Golden State is slated to receive more than $17 billion from the federal government for the expansion in 2017-18.   Gov. Jerry Brown unveiled his revised $183 billion state budget last week.

If the House GOP plan were adopted, Medi-Cal expansion enrollees would likely fall off the rolls in large numbers after 2020 because of natural churn in and out of the program and a new provision that would require enrollees to renew their coverage every six months, twice as often as under current law.

As expansion enrollees drop, so would the more generous federal funding. Facing reduced federal support, the state may not be able to continue to allow people to enroll under the expanded eligibility criteria, said Deborah Kelch, executive director of Insure the Uninsured Project.

As lofty as the ACA is it did not take into account 3, 4, or 5 years down the road what financial cycles can do to state and/or federal budgets.  

The Affordable Care Act continues to sink. Economic realities will impact state and federal monies eventually forcing reductions in enrollees and reimbursements to hospitals and providers.

Of course the Feds can always print more currency.

“This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.”

California To Pay About $1.3 Billion For Medicaid Expansion In First Year Of State Contributions | California Healthline