Medi-Cal expansion will not increase access to quality care | opinion


To sum up

As California makes Medi-Cal available to all undocumented migrants, a health care researcher says the state should cultivate private insurers if access to quality care is the ultimate goal .

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In January, California became the first state to open its Medicaid program, called Medi-Cal, to all undocumented immigrants within its borders. About 700,000 adults between the ages of 26 and 49 now qualify for publicly funded health coverage.

It is the fourth expansion of the program to undocumented immigrants, after children became eligible in 2015, young adults in 2019 and those 50 and older in 2022.

No other state has yet come as far as California. Others have partially expanded public health coverage for undocumented people. At least one Minnesota plans to follow California’s lead and offer coverage to low-income undocumented immigrants in the state next year.

These initiatives are based on an underlying belief that opening Medicaid to more people is a cost-effective way to get them quality care. This is wrong. There are much better and less expensive ways to expand access to quality health care coverage.

First, some background. Medicaid is the public health insurance plan for low-income residents. It is jointly administered and funded by the states and the federal government. The feds provide at least $1 for every dollar that states spend on the program.

Last year, California spent $152 billion on Medi-Cal. A quarter of this amount comes from the General Fund of the State.

The new Medi-Cal expansion could cost more than $2 billion each year, according to the state Legislative Analyst’s Office. And that could be a major understatement.

Last year alone, more than 300,000 undocumented people crossed the border between Mexico and California. If this trend continues, taxpayers, who already subsidize Medi-Cal coverage for 14.6 million Californians, could be in for more.

California cannot afford the additional expense. The state is already struggling with a $38 billion budget deficit, according to the governor’s math. The state Legislative Analyst’s Office pegged the budget deficit at $73 billion.

However, Gov. Gavin Newsom is doubling down, recently saying he is “committed” to expanding Medi-Cal. You may come to regret this commitment. States are poised to pick up a bigger share of their overall Medicaid bill as COVID-era federal aid expires. This year, state Medicaid spending will increase by 17%.

Adding more people to Medi-Cal will not only drain state coffers, it will make it harder for the program’s legacy beneficiaries to secure care. There are no longer enough providers available to serve Medicaid recipients. According to a 2021 report from the Medicaid and CHIP Payment and Access Commission, only 70% of physicians accept new Medicaid patients. This compares to 90% of providers who reported accepting new patients with private insurance.

The reason for this disparity is clear: Medicaid does not pay enough to providers. The program reimburses doctors 30% less than Medicare. And Medicare pays 30% less than commercial insurance.

As a result, Medicaid beneficiaries are 1.6 times less likely to successfully schedule a primary care appointment and 3.3 times less likely to successfully schedule a specialty appointment compared to those with private insurance.

When Medicaid recipients cannot access a regular provider, they are more likely to go to the emergency room. A 2008 study of Oregon’s Medicaid expansion found that coverage was associated with a 40% increase in emergency department visits per person, including visits for conditions that could have been treated by a primary care provider.

Adding millions more people to the Medi-Cal rolls could exacerbate these problems for all beneficiaries.

If improving access to quality care is truly what California and every other state considering similar moves is after, there are better ways to do it.

California could start by lifting the ban on selling short-term plans. These plans can cost up to 70% less than unsubsidized options on the Obamacare exchanges. And since undocumented immigrants are not eligible to sign up for Obamacare or receive premium tax credits, short-term plans can be an especially good option.

Private insurance options can provide the affordable care that state residents want and need. Lawmakers in California and across the country would do well to start expanding access to them instead of their failed Medicaid programs.


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