Funding Medi-Cal by Initiatives

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Medi-Cal spending has exploded and along with the state obligated to take over part of the federal health care funding next year, hospitals and health care providers are scrambling to look for new sources of money. In California, that means a trip to the ballot box and revenue raising initiatives. Despite a clear need to improve Medi-Cal payouts to providers and to cover health care for the needy, too often the root cause leading to an expanded welfare program is ignored—not enough good paying jobs and economic growth.

One in three Californians are on Medi-Cal. California’s version of the Medicaid program for the poor and disabled has grown dramatically with introduction of the Affordable Care Act. As recently as 2009, Medi-Cal covered one in six Californians. Today’s Medi-Cal budget reaches toward $100 billion, equivalent to what would be the fourth highest state budget in the U.S. behind only California, New York, and Texas.

Three ballot initiatives in November are designed to increase Medi-Cal funding. The California Hospital Association is supporting all three with various degrees of support from other medical providers.

Proposition 52 would keep in place a program initiated in 2009 that allows for fees from hospitals to draw matching federal funds for Medi-Cal services. The idea is to prevent the legislature from using the funds for other purposes. Proposition 55, the income tax extension initiative, would dedicate about $2 billion a year of the expected $8 billion a year take to Medi-Cal. The tobacco tax increase proposal, Proposition 56, would send about $1 billion a year to Medi-Cal.

Considering the Medi-Cal fixes rely heavily on a temporary tax increase (Prop 55-income tax) and a tax increase that historically shows diminishing revenue over time (Prop 56-tobacco tax), the troubled Medi-Cal program needs a more stabilizing solution.

Besides, there is no certainty that the ballot propositions will even pass.

A more permanent solution means improving the business climate so that workers can enjoy health care programs that they or their employers furnish relieving the state of a health care obligation.

As I wrote over a year ago here, obstacles should be removed so that the private sector can increase well-paying jobs. Then many of the people and their families using Medi-Cal can move away from the state sponsored health care and get company or individual health insurance.

In addition, Medi-Cal’s value must be brought home to patients. Health care providers have told me that they sometimes have to double and triple book Medi-Cal patients because they don’t appear for their appointments. The reason often suggested is that many patients are not required to pay anything for the appointment and thus put little value on the service. A nominal co-pay by all patients would add value to the service and change the character of the program.

Californians should receive health care due them and health care providers should be justly compensated for their work. But the state needs to consider a long-term solution to covering an ever expanding spending obligation. Continually seeking tax increases on one kind of tax or another will only stall the economy, not help it to grow.

Funding Medi-Cal through ballot initiatives is not a fix for the Medi-Cal mess.

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