Governor Proposes Monthly Medi-Cal Premiums

By Sandy Kleffman

CONTRA COSTA TIMES

For the first time, California would require hundreds of thousands of Medi-Cal recipients to pay a monthly premium for health care benefits under Gov. Arnold Schwarzenegger's budget proposal released Monday.

The governor unveiled his long-awaited plan for revamping Medi-Cal, which provides health benefits to 6.6 million low-income Californians. That's nearly one in six state residents.

In addition to monthly premiums, the governor proposed capping adult dental benefits at $1,000 annually.

But his plan largely avoided more dramatic cuts that had been tossed around during a lengthy public review. For example, it did not call for eliminating some benefits entirely, narrowing eligibility, setting up a tiered benefit system or slashing the rates paid to Medi-Cal providers.

"Some of the more onerous things we anticipated, we do not see," said Carmela Castellano-Garcia, chief executive officer of the California Primary Care Association, which represents 600 community health clinics.

"We're cautiously optimistic."

She and other health care advocates, however, vowed to fight the monthly premium proposal, which would affect 550,000 recipients whose incomes exceed certain levels.

"We believe that this will cause a lot of those families to fall off of the program," said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

"While the governor says no new taxes, half a million Californians will have to pay more for health coverage."

For years, state officials have explored ways to clamp down on rising Medi-Cal costs.

In the past five years, Medi-Cal expenses soared 50 percent while a program expansion added 1.2 million recipients.

More than 18 percent of California residents now qualify for the program. Among the 10 most populous states, only New York has a higher percentage of its residents receiving such aid.

Yet while California provides more optional Medi-Cal benefits than any other large state, it also has one of the lowest average costs per recipient.

California paid an average of $4,605 per Medi-Cal beneficiary in 2003-04 compared to a national average of $5,869.

Health and Human Services Agency Secretary Kim Belshé called the premium a modest proposal that would be in line with many company health plans and the premiums charged by the state Healthy Families program.

It would apply to Medi-Cal recipients whose monthly income exceeds poverty levels, or $1,306 for a family of three.

It also would apply to seniors and people with disabilities whose income exceeds the monthly Supplemental Security Income/State Supplemental Payment amount. That's $812 for a single person and $1,437 for a couple.

The premium would cost $10 per month for adults and $4 for each child, with a maximum per-family amount of $27.

Paying a modest sum would emphasize personal responsibility and enable families to take ownership of their health care, Belshé said. Critics weren't convinced.

"Our worry is that our Medi-Cal patients are already surviving on very little," Castellano-Garcia said. "This is a huge issue for these low-income individuals."

If people drop off the Medi-Cal rolls because they can't make the monthly payments, she added, community clinics will continue to provide health care as they do for other uninsured people.

It will be tough for the struggling clinics to absorb such costs, she said.

The Medi-Cal plan also calls for the state to transition more Medi-Cal recipients to managed-care programs.

The Schwarzenegger administration reiterated its goal of ensuring that all children have health insurance and announced a proposal for streamlining the application process.

The proposal also earmarks $5.9 million in general fund money and $8.6 million in matching federal funds to help people apply for the Healthy Families and Medi-Cal programs.

Schwarzenegger also announced a $6 million "obesity initiative" aimed at improving the nutritional quality of food in schools and promoting increased physical activity in businesses and communities.

The plan includes a governor's summit on the issue. The budget notes that Californians have gained an average of 10.7 pounds each in the past decade.