Dan Walters: Medi-Cal history may be repeating

dwalters@sacbee.comFebruary 24, 2013 

Nearly 50 years ago, then-Gov. Pat Brown and the California Legislature took a giant leap of faith with an expansive new health care program for the state's low-income residents that became known as Medi-Cal.

It was a leap of faith because, in reality, nobody knew how, or even whether, it would work.

"No one in the world thought it through," Gordon Duffy, who was then a freshman assemblyman and later became chairman of the Assembly Health Committee, recalled in a 2008 interview. "They (the Brown administration) really pushed so hard on the positive effects. … Everyone said it was a wonderful thing."

Medi-Cal has evolved into a cradle-to-the-grave program, spending $60 billion a year on 8-plus million enrollees. Among other things, it pays for nearly half of the state's 500,000-plus maternities each year and a huge share of nursing home fees for the infirm elderly.

The federal government provides roughly half of the cost, but it's been a political football, with constant adjustments in medical payments and covered services that have reduced the number of providers willing to take Medi-Cal patients.

Brown's son, Jerry, now holds the governorship for the second time and wants to expand Medi-Cal by at least a million more Californians who will be qualified by the new federal Affordable Care Act's higher income thresholds.

Cost estimates range from about $2 billion a year to more than $10 billion, with the federal government promising to pick up all costs for the next three years (and at least 90 percent thereafter). But the state also could be on the hook for several billion dollars a year if, as many anticipate, another million-plus poor residents who already qualify for Medi-Cal also join the program.

Many implementation bills have been introduced, most prominently one by Assembly Speaker John A. Pérez. But details remain cloudy, such as whether the state will manage expansion or it will be left to counties.

The Pérez bill opts for state management – which pleases state employee unions – and the Legislature's budget analyst, Mac Taylor, also endorses state implementation to provide uniformity to what is now a widely varying patchwork of local government and charity services.

That particular issue is a dilemma for Brown, who has not taken a position but who has generally endorsed "subsidiarity" – having local authorities exercise as much power as possible, from managing felons to educating children.

The biggest unknown, however, is whether a medical system that complains constantly about low payment rates – and has many doctors near retirement – can absorb perhaps 2 million more Medi-Cal patients without imploding.

A failure to consider all downside risks in 1965 led to decades of angst; will history repeat itself?

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