Resolution: 13-04

Supporting Principals For Medi-Cal Redesign

WHEREAS, Medi-Cal provides health insurance to one in six individuals in California, and more than 120,000 San Franciscans, including people with disabilities, low-income children and their families, and members of other vulnerable populations; and,

WHEREAS, Governor Schwarzenegger announced his plans to restructure the Medi-Cal program in January 2004 and intends to release a full proposal regarding the Medi-Cal Redesign in January 2005 as part of his proposed budget for fiscal year 2005-2006; and,

WHEREAS, the Redesign is to be accomplished through a Section 1115 Medicaid Demonstration Waiver, enabling the State to use federal funds in ways not otherwise permitted; and,

WHEREAS, though the Administration has cited the high costs of the Medi-Cal program as a basis for the Redesign, California’s Medi-Cal spending per beneficiary in 2001 is the lowest in the nation at $2,334 per beneficiary compared to the nationwide average of $3,961; and,

WHEREAS, the Administration published the following objectives for the Redesign:

• Simplify Medi-Cal eligibility;
• Implement a tiered benefit structure;
• Incorporate beneficiary cost-sharing;
• Expand organized delivery systems; i.e., managed care, disease management; and
• Identify new sources of federal funding participation and potential efficiencies in the system; and,

WHEREAS, the City and County of San Francisco has responded in writing to the California Health and Human Services agency regarding the Redesign, expressing concern about certain tentative proposals and offering detailed suggestions for improvements to the Medi-Cal program; and,

WHEREAS, the Health Commission has three major areas of concern regarding the Redesign:

• The State’s pursuit of a Section 1115 waiver will likely result in a cap on federal funding, putting the State, the health care safety net, and local public health care systems at a significant financial disadvantage, likely resulting in lower Medi-Cal enrollment, lower reimbursement, and an increase in the uninsured;
• The State’s current proposal to restructure California’s two Intergovernmental Transfer programs (SB 855 and SB 1255) and shift Aged, Blind and Disabled Medi
• Cal beneficiaries into managed care could result in a significant loss funding for California’s safety net providers; and
• The State’s objective to increase cost-sharing for Medi-Cal beneficiaries by implementing premiums and increased co-payments will have a negative impact on access and appropriate utilization for current beneficiaries and discourage the enrollment of new beneficiaries, further straining the public health care safety net; and

WHEREAS, any changes to Medi-Cal will have a large impact on the State’s residents and on the local safety net healthcare delivery system; now, therefore be it

RESOLVED, that the Health Commission supports in full the recommendations made by the agencies and Departments of the City and County of San Francisco in the “City and County of San Francisco Comments on Medi-Cal Redesign” letter sent to CHHS on May 7, 2004; and, be it

FURTHER RESOLVED, that the Health Commission adopts the following principles related to Medi-Cal Redesign:

• Protect eligibility for individuals who are currently eligible;
• Simplify the program for beneficiaries and providers;
• Improve quality of and access to healthcare services;
• Avoid disincentives to enrollment and service utilization, such as co-payments and premiums, for low-income beneficiaries;
• Maintain the health care safety net;
• Ensure that the financing for the health care safety net is, at a minimum, funded at current levels and is sufficiently flexible to address the needs of Medi-Cal eligibles into the future;
• Consider innovative programs that efficiently and cost-effectively address the health care needs of populations in the least restrictive settings and avoid costly inpatient services; and, be it

FURTHER RESOLVED, that Health Commission directs the Director of Health to work closely with other local agencies and providers to monitor the development of the Medi-Cal Redesign proposal and to participate in the process by communicating with the State regarding the issues involved and the likely impact of changes.

I hereby certify that the San Francisco Health Commission at its meeting of September 7, 2004 adopted the foregoing resolution.

Michele M. Olson, Executive Secretary to the Health Commission