Medi-Cal Transformation


In 2014, up to three million uninsured low income Californians will be eligible to enroll in Medi-Cal, joining the 7.3 million already in the program and another 3 million uninsured will be eligible for private insurance the Exchange.[i] Some want to shift an additional 1 million persons from the Exchange to a Basic Health Plan operated by Medi-Cal.[ii]

Projected participation rates in Medi-Cal vary by a factor of two.[iii] If we fail to fix Medi-Cal we will likely have low enrollment. New program participants will need an eligibility and enrollment system that is easy to understand and use, a primary care doctor and a well-managed delivery system built on prevention and dedicated to improvement in health status.

Since the federal government will pay 100% of the costs of the new eligibles for the first three years, eventually declining to 90% by 2019, this is an enormous opportunity and a daunting challenge for the Medi-Cal program, for those policy makers, advocates and clinicians who care about the health status and health needs of low-income Californians.

To take advantage of the opportunity, we need to address the following before 2014: financing the system, simplifying eligibility and enrollment, and improving reimbursement, outcomes and provider participation. Without making these improvements, participation, subscriber health outcomes and provider satisfaction are likely to be low.[iv]This paper is intended to promote this discussion and hopefully its resolution.

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[i]Shana Lavaredda and Livier Cabezas, Two thirds of California’s 7 Million Uninsured May Obtain Coverage Under Health Care Reform (UCLA Center For Health Policy Research, February 2011) at www;

[ii] Mercer, Exploring the Financial Feasibility of Basic Health Plan in California (California HealthCare Foundation, May 12, 2011) at

[iii] Long P, Gruber J, “Projecting the Impact of the Affordable Care Act on California,” Health Affairs 30, No. 1 (2011): 63-70 project Medi-Cal participation at 1.7 million and California’s Exchange participation at 4 million. Sommers, B. and Epstein, A, Medicaid Expansion, the Soft Underbelly of Health Care Reform (November 25, 2010) N Eng J of Med 2010; 363:2085-2087. Massachusetts and Pennsylvania had a 80% participation rate, California a 60% participation rate and Oregon and Florida a participation rate of slightly over 40%. The Lewin Group projects added California Medicaid enrollment of 2.3 million due to the ACA. Sheils, J. et al. The Impact of the Medicaid Expansions and Other Provisions of Health Reform on State Medicaid Spending (The Lewin Group, December 9, 2010) at

[iv] Ibid.