Wednesday, May 24, 2017

Unkind Cut - Part 2

Our previous post noted the UC prez's concerns about federal budget issues. One issue only tangentially mentioned was federal health expenditures under "Obamacare." Of course, UC hospitals would potentially lose revenue to the extent that funds for Medi-Cal are reduced. But there is a larger effect over the long term.

Back in the day when the Master Plan (with its promise of free tuition) was developed, the state's expenditures for Medi-Cal (Medicaid) were zero - since the program didn't exist.

Under Obamacare, the state expanded the number of people covered by Medi-Cal substantially, with federal budgetary support. To the extent that such support goes away or is reduced, the state will either have to fund the Medi-Cal expansion on its own, i.e., out of general fund revenue, or reduce coverage. So there will be direct competition for funding between UC and Medi-Cal. Of course, any economic downturn would greatly increase that competition. Already, concerns about the future of Medi-Cal funding are being expressed. Example:

California will contribute about $1.3 billion to its Medi-Cal expansion this year, a new expenditure that will further strain an already burdened health care budget. 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...

Full story at

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