With the demise of the American Health Care Act, massive cuts in federal financing of Medicaid are off the table for now. Yet there is little doubt that efforts to curb federal spending on Medicaid will continue or that California has a lot at stake.
Even before the November election, state policymakers and stakeholders were seeking options to address the shaky financing of California’s Medicaid program, Medi-Cal. Rising health care costs, economic downturns, and threats to federal funding are nothing new, but Medi-Cal’s scale is unprecedented — 14 million people (one in three Californians) are enrolled at an annual cost of $100 billion (the federal government currently covers about 66% of those costs). What can California lawmakers do to ensure the health of this program?
The PPIC report sets the stage for the deeper debate and analysis that will be needed. It describes how Medi-Cal is funded and explains California’s current budget and tax structure. It examines a range of potential options for raising state revenue to support Medi-Cal, including increasing personal and corporate taxes; rolling back tax deductions for employer-based health coverage, charitable giving, and mortgage interest; raising sales taxes or applying them to services; and imposing “sin taxes” on things like alcohol, tobacco, or snacks.
CHCF has funded Blue Sky Consulting to model the options identified by PPIC. Blue Sky’s analysis, expected this summer, will estimate revenue for some of the options described in the PPIC paper under a variety of scenarios, and examine revenue generated from California residents through Affordable Care Act taxes.
We don’t know what the next threat to Medi-Cal will be or when it will come, but California must prepare for it by putting Medi-Cal financing on a more stable footing.
Christopher Perrone is director of CHCF’s Improving Access team, which works to improve access to coverage and care for low-income Californians. Chris was previously director of the foundation’s Health Reform and Public Programs initiative, where he led efforts to improve the policies and practices that shape Medi-Cal and other publicly funded health care programs, and to promote greater transparency and accountability within these programs.
Prior to joining CHCF, Chris served as director of planning for the Massachusetts Division of Medical Assistance. He was the first external recipient of the Globe Award, given by the Office of Strategic Planning at HCFA (now CMS), for his work to improve the delivery and financing of acute and long-term care services for low-income seniors. He has also held positions with The Lewin Group, the American Psychological Association, and the Center for Health Policy Studies at Georgetown University. Chris received a bachelor’s degree from the University of California, Berkeley, and a master’s degree in public policy from Harvard University.