Dr. Jason Greenspan (L) and emergency room nurse Junizar Manansala care for a patient in the ER of Mission Community Hospital where doctors held a press conference outside on a class action lawsuit against the state of California by a coalition of emergency room physicians claiming that without additional funding, the entire emergency healthcare system is on the verge of collapse on January 28, 2009 in Panorama City, California. According to the coalition, the cost of providing emergency room treatment has nearly doubled over the past decade and patient load increased by more than 28 percent while Medi-Cal reimbursements have remained largely unchanged. During that time, 85 California hospitals in California have closed and an additional 55 facilities have shut down their emergency rooms. California now reportedly ranks worst in the nation for access emergency care and last in emergency rooms per capita. California has seven emergency rooms per million people while the national average is 20 emergency rooms per million people.
As the U.S. Supreme Court considers the constitutionality of the federal health legislation known as Obamacare, the “individual mandate” – requiring Americans to have health insurance – is getting all the attention. Will it survive?
But a different part of the bill – a part that has also been challenged in court – may be just as important to the state of California.
That part is the expansion of Medicaid – known as Medi-Cal here in California. Obamacare expands Medi-Cal, and Medicaid, as a way of extending coverage to people too poor to purchase insurance by themselves. In short, Obamacare expands eligibility for Medi-Cal program to nearly two million Californians who currently are ineligible. This would increase the number of people covered by Medi-Cal from roughly 7.5 million to more than 9 million, in a state of some 38 million. California has already begun to enroll some of these newly eligible people through county programs
This would have a huge impact on people in California. And the Medi-Cal changes will occur in conjunction with a host of otherchanges, including the establishment of a health benefit exchange for purchasing insurance. Already, the state has done more work than most in preparing for these changes.
But the change also could have an impact on the already-stretched budget – bringing in more revenues but also creating new costs. Since Medi-Cal is a program in which the state shares costs with the federal government, the Obamacare expansion of Medi-Cal would bring in billions more from the federal government, while also requiring the state government to dole out more for its share of the new Medi-Cal program participants.
Estimates have put the additional cost to the state general fund at more than $2 billion – not huge, in an overall state budget of $140 billion, but still significant, given the constant cuts necessitated by the broken budget process. Advocates argue that the net costs will be less, based on savings from more people being insured, but the exact amount of any such savings is speculative.
Some states had challenged Obamacare in the courts precisely because it would increase state spending. That challenge is seen by legal scholars as one of the weakest pieces of the constitutional challenge to the law.
If the Medicaid provisions of Obama are struck down, California would see more uninsured people and less money from the federal government – albeit with less of a direct hit on the state budget.