Consumer Federation of California

In a major step forward for health reform implementation, last week the federal government gave the go-ahead for eight more states to start their insurance exchanges.

Along with California, the states of Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah received conditional approval to move forward with state based exchanges, while Arkansas received approval for a federal partnership exchange. Nineteen states and the District of Columbia will be operating their own exchanges come fall. Other states will have state and federal partnership exchanges, or will have exchanges that are run by the federal government.

The exchanges are new marketplaces where consumers will be able to conveniently shop for quality, affordable health insurance that meets federal guidelines and where many people will be able to receive subsidies to help pay for coverage.

California’s exchange, Covered California, has been hard at work to ensure that it will be ready to serve the millions of uninsured Californians that will be eligible for exchange coverage. The next Covered California Board Meeting will be January 17, 2013 in Los Angeles, and is open to the public.

In related news, the federal government has also approved a request from the state to eliminate the Healthy Families program, an insurance program for children of working families, and transition almost 900,000 children to Medi-Cal over the course of 2013. This transition was approved last year as a means of saving the state $73 million dollars; it saves the federal government money as well, since Medi-Cal rates are lower than Healthy Families rates.

Since this policy was first proposed, the transition has drawn criticism from advocates concerned that children could suffer from disruptions to care or face challenges in accessing the care they need. These worries have been sharpened by the very serious problems faced by seniors and persons with disabilities as they transitioned from fee-for-service Medi-Cal to Medi-Cal managed care: more than 20,000 of these fragile Californians were denied access to their doctors. Despite concerns raised about the speed and the magnitude of the Healthy Families transition, the state pressed forward and received approval from the federal Centers for Medicare and Medicaid Services (CMS) in a letter dated December 31, 2012. The transition of children will proceed in four phases, with over 197,000 children transitioned on January 1, 2013.

However, CMS’ approval is contingent on several conditions that protect the children that will be impacted.

First, CMS is implementing an ongoing monitoring and evaluation process for each phase. If the monitoring data indicates there are problems, or if CMS is not pleased with the evaluation results from one phase, they will not allow the state to move forward with implementation of the next phase. That is, subsequent phases of the transition will each require written CMS approval. The federal government will be looking closely at whether the state is successfully providing coverage to children; this includes meeting network adequacy standards and ensuring continuity of care.

Secondly, the federal government will be partnering with the state in stakeholder engagement efforts, including listening sessions, throughout the transition.

Additionally, CMS is requiring that the state conduct beneficiary surveys so that they can hear directly from those families who are affected by the transition. The beneficiary surveys will help the state ensure transitioned children have adequate access to medical, dental, specialty care, mental health, and substance abuse services, as well as overall family experiences with the transition.

The California Legislature has already held several oversight hearings, and it is anticipated that there will be more as the transition progresses.

This transition will, upon its completion, add nearly 900,000 children to the Medi-Cal system. This is an opportunity for the state to look at ways to strengthen and improve the Medi-Cal program, and by extension the health care system on which Californians rely.

The federal health reform law, the Affordable Care Act, provides some new resources, like a primary care provider rate increase, to help improve Medi-Cal at this crucial time. There is much more that California can do in the new year to make Medi-Cal a better program for current and new enrollees, with a firmer foundation for an improved health system.