Gov. Newsom signed the finalized $308 billion FY 22-23 state budget last week, officially allocating funding to increase access to abortion services, establish an Office of Health Care Affordability, expand Medi-Cal coverage to all undocumented Californians, and more. We cover a couple of the budget’s provisions below, along with recent bill movement in the legislature and insight on how stable housing can significantly reduce health care costs in California.
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State of Reform
1. Legislative update: Kaiser Medi-Cal contract, COVID misinformation, and more
After some contentious hearings, Gov. Newsom signed a bill to codify the Kaiser no-bid Medi-Cal contract negotiated earlier this year. Numerous organizations and state counties like Butte and Glenn have spoken out against the deal, citing concerns over Kaiser encroaching on the membership of local health plans and undermining a public Medi-Cal model based on local control.
A bill that would authorize the California Medical Board to revoke the licenses of physicians who have provided COVID-19 misinformation to patients passed the House and is nearing a vote on the Senate floor. Two mirror bills that would require Covered California to provide affordability assistance to reduce cost-sharing have also seen recent advancement.
2. California becomes first state to offer Medicaid to all undocumented residents
One of the biggest provisions of the recently signed FY 22-23 budget is the expansion of Medi-Cal coverage to undocumented individuals aged 26-49—which, coupled with previous coverage expansions for the undocumented, makes Medi-Cal available to all undocumented individuals. Sarah Dar of the California Immigrant Policy Center said this long-awaited expansion will also benefit the state’s struggling workforce, as the 26-49 age range is the “prime working age” and the lack of coverage often caused individuals to miss work due to health issues.
John Baackes, CEO of LA Care Health Plan, also praised the expansion, saying LA Care anticipates around 140,000 newly eligible individuals to enroll in its Medi-Cal plan once the expansion is implemented on Jan. 1st, 2024. However, he believes that it will illuminate the state’s low Medi-Cal reimbursement rates. “I think it’s going to bring about what’s long overdue, which is a serious discussion about how we fund Medicaid compared to Medicare, or how commercial insurers are able to compensate providers,” he said.
3. What They’re Watching: Moira Kenney, Unite Us
Unite Us, an organization that bridges health care and social services for individuals in need, is using its technology to create networks of care in California that swiftly connect patients to social services that otherwise might be hard for them to reach. Moira Kenney, West Coast Regional Network Director at Unite Us, talked to State of Reform about her organization’s work to bridge siloes in California’s health care system and address the social determinants of health.
“What Unite Us allows us to do is really continue [the patient’s] journey. So as we onboard more organizations to our networks across California, people who are supporting these individuals are able to communicate and make sure that those individuals receive the support and care that they need,” she said.
4. After 2 years, California now has Office of Health Care Affordability
“This is my most important work to date,” said Asm. Wood after his long-term effort to establish an Office of Health Care Affordability was signed into law on June 30th. The initiative received $30 million from the FY 22-23 state budget, paving the way to establish an office to analyze cost drivers in California’s health care system and use its findings to recommend policies designed to lower the ever-increasing cost of health care in the state.
The bill received opposition in the legislature from numerous hospital systems that were concerned about which entities would be required to report information to the office. Wood told State of Reform they reached an agreement requiring such reporting for all health care entities in a given area that have a significant impact on pricing. “The creation of OHCA has been a true partnership with Governor Newsom and his administration, my colleagues in the Assembly and Senate, as well as a collaboration of many stakeholders including the health care entities that will be required to provide data as well as the people who are paying for and receiving care,” he said.
5. Permanent housing could significantly reduce health care costs
Unhoused individuals account for 3% of hospitalizations and 2.5% of emergency services in California. With services like emergency care having a costly impact on the health care system, Mari Castaldi, Legislative Advocate at Housing California, says providing stable housing to unhoused Californians is not only beneficial to these individuals’ health but will also save the state money on health care services.
Castaldi noted that people given supportive housing have been shown to visit the emergency room and other public emergency institutions less frequently. But when an individual is unhoused, they tend to delay care and make any existing health problems worse—often eventually ending in an emergency room visit. “[ER care] can be less effective than ongoing care for a chronic condition, but importantly, it’s also more expensive to treat people in the ER than it would be to actually provide them housing,” she said.