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The CHCF Blog

Medi-Cal's 50-Year Journey from Narrow Welfare Program to Engine of Change in California Health Care

Sandra R. Hernández, President & Chief Executive Officer
Sandra Hernandez
Sandra R. Hernández

When Randy Seriguchi moved to California from the East Coast last summer, the 30-year-old lawyer took a short-term job with a nonprofit education policy group in Sacramento. While the position didn't include health insurance, Seriguchi calculated that he could go without coverage until finding a job with benefits. He certainly didn't expect that he would develop a severe sinus infection just as his temporary job ended and his income dried up. He tried to tough it out with over-the-counter remedies, but the infection continued to get worse.

"October was one of the worst months of my life," he said. "I had constant facial pain, headaches, and pressure on the right side of my face." On Halloween, Seriguchi descended into delirium. Half his face was paralyzed. His money worries, which had kept him away from doctors that month, finally yielded to the pain and fear, and he went to an emergency room expecting bad news about his health and worse news about how much the care was going to cost. He was shocked to learn from an admitting clerk that he was eligible for emergency enrollment in Medi-Cal, California's Medicaid program for low-income residents, and that there would be no big bills. Doctors ordered a CT scan, diagnosed Bell's palsy (a temporary paralysis of his face caused by damaged nerves), and prescribed medicines to reduce the inflammation and pain.

While Seriguchi's eye still won't completely close and his full smile hasn't been restored yet, he pronounces himself much better — and greatly relieved. "I'm definitely fortunate to have been in California," he said. Taking advantage of the Affordable Care Act (ACA), the state expanded Medi-Cal eligibility for single, childless adults. "If I was in Georgia or Alabama [which have not opted to expand Medicaid eligibility], it would be a different story."

"I'm definitely fortunate to have been in California," said Randy Seriguchi.

It would also have been a different story for Seriguchi and millions of others if, in March 1966, state leaders had not started down the long and winding path to ensuring all Californians have access to affordable care that is available when and where they need it. That goal hasn't been reached yet, but thanks to the continuing evolution of state and federal health policies, we are closer to it. Medi-Cal's umbrella today provides care that would otherwise be inaccessible to vast numbers of low-income children, families, single adults, former foster youth, seniors, and people with mental or physical disabilities.

Health Care Cornerstone

With this added responsibility comes an expanded role in transforming the state's overall health care system. Medi-Cal's $94 billion budget makes it the cornerstone of California's $300 billion health care system. As a result, Medi-Cal is not only a lifesaver for vulnerable people in need. It is also a linchpin of stakeholders' efforts to transform health care so that it works for all Californians.

When Medi-Cal opened for business 50 years ago, America was at an extraordinary moment in its history. The US was racing to land men on the moon, the Rev. Martin Luther King Jr. was marching for civil rights, Ronald Reagan was running (successfully, it turned out) for governor of California, and the patriotic hit song "The Ballad of the Green Berets" was perched atop the Billboard Hot 100 as the Vietnam War was escalating. Only eight months earlier, President Lyndon B. Johnson had signed the landmark law establishing Medicare and Medicaid — the biggest health policy change in the nation's history.

In that first year, Medi-Cal covered a small population of medical indigents as an adjunct to government "welfare" benefits. About 1.3 million Californians — only 6.8% of the state population — signed up for Medi-Cal. This cost a grand total of $507.5 million.

As Seriguchi learned, Medi-Cal has evolved from a limited safety-net program to one with a broader mission that increasingly serves new types of enrollees: small-business owners, self-employed workers, and people striving to climb the economic ladder. Because California stopped categorizing people as either worthy or unworthy of health benefits, one in three Californians now has Medi-Cal/Medicaid benefits — compared to the national rate of one in five.

Medi-Cal has put Randy Seriguchi's life and career plans back on track.

Since then, California's muscular economy, remarkable natural resources, expanding political and cultural influence, growing population, and inventiveness have propelled the state to global leadership in many fields — including creating a health care safety net for its most vulnerable people.

Before the ACA took effect, Medi-Cal enrollment stood at 7.9 million. Since implementation on January 1, 2014, the program has signed up 4.7 million more people. And starting next month, the umbrella will open wider still. For the first time, undocumented low-income children will be eligible for full-scope Medi-Cal. It's a historic step forward to cover yet another overlooked group, and CHCF is proud to be working with other California funders as well as state and local agencies to ensure that the 170,000 to 250,000 newly eligible kids are properly enrolled and receive the coverage and care they need.

"State of Medi-Cal" to Be Fourth Largest

By next year, Medi-Cal enrollment is projected to reach 13.5 million, the largest Medicaid enrollment of any state. Only three states have entire populations greater than that.

Medi-Cal's approach to how it delivers care is shifting as well. The California Department of Health Care Services (DHCS), which operates Medi-Cal, used to simply pay medical bills. Now it cares for most enrollees through managed care plans. The California Health Care Foundation is working with state officials, health plans, providers, consumer groups, and other stakeholders to help Medi-Cal navigate the path to health care that works for all. Key among these ideas are rewarding value over volume, allowing health plans to share savings they achieve, and advancing broad-based delivery system reform that will sustain community health centers.

Medi-Cal has put Randy Seriguchi's life and career plans back on track. In July he will begin a new job at a nonprofit organization in San Francisco that offers employer-sponsored health insurance. His Medi-Cal experience will have been brief, but important to his well-being and his prospects.

Hundreds of thousands of people work to keep Medi-Cal moving, including 3,700 DHCS employees, 140,000 physicians, and thousands more local government workers and stakeholders. As we take note of Medi-Cal's golden anniversary, it's important not to let the technical challenges of running an extremely complex program obscure the fact that Medi-Cal stands as an eloquent expression of the Golden State's unwavering commitment to a caring and just society.

About Sandra

Dr. Sandra R. Hernández has been president and CEO of the California Health Care Foundation since January 2014. CHCF is an independent foundation with assets of more than $700 million, headquartered in Oakland, California, and dedicated to making health care work for all Californians, especially low-income and underserved populations.

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