Mainstreaming Medi-Cal Investing in Patient Access, Improving Economic Productivity

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Date: 06/03/16
Author: Micah Weinberg
Publisher: Bay Area Council, Economic Institute
Type: Report
Level: State

Medi-Cal is massive. It covers over 13 million people, more than the entire population of every state except Texas, New York, and Florida. As California’s state Medicaid program, it finances healthcare access for low-income children and adults as well as pays for a great deal of care for seniors and the disabled. Over 50 years, Medi-Cal has grown from a niche safety net program to an essential foundation of the state’s healthcare delivery system and economy. It is the largest Medicaid program in the nation, with an annual budget comprising state and federal funds of more than $90 billion. Because Medi-Cal is the provider of healthcare coverage for such a large percentage of the state’s population and the second-largest item in the state budget, it is critical to understand the growth of Medi-Cal over time, its economic and social benefits, and its strengths and weaknesses. It is particularly important to recognize that this is now a program that covers millions of working Californians—and hence enhances their health and economic productivity—in addition to paying for the care of millions of children, the disabled, and elderly residents. In spite of the large absolute size of state spending on Medi-Cal, the program compensates healthcare providers significantly less than private payers and Medicaid programs in other states. Increasing access—and reducing the burden on the privately insured to fund California’s Medi-Cal delivery system—may require significant additional investments in this program. However, improving the Medi-Cal program is not simply about raising reimbursement levels. There are important reforms that will get the state better value for its spending on Medi-Cal, many of which are being advanced through a landmark agreement that California has just negotiated with the federal government.

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