TL/DR –
California became the first state to open its Medicaid program, Medi-Cal, to all undocumented immigrants, with 700,000 adults now qualifying for public health coverage. However, the expansion is seen as expensive, with the state already spending $152 billion on Medi-Cal and facing a budget deficit, and could strain healthcare services, with a shortage of providers willing to accept Medicaid patients due to lower reimbursement rates. Alternatives suggested include lifting the ban on short-term plans which could be up to 70% cheaper than unsubsidized options on the Obamacare exchanges, offering a viable option for undocumented immigrants.
California Extends Medicaid to Undocumented Immigrants
In January, California became the first state to extend Medicaid (Medi-Cal) to all undocumented immigrants, allowing 700,000 adults aged 26-49 to qualify for public health coverage. This is the fourth expansion, with Minnesota planning to follow suit.
However, this move may prove costly, with estimates suggesting that the expansion could cost over $2 billion each year. This figure could be significantly higher if the trend of 300,000 undocumented individuals crossing the border annually continues. The additional expense comes at a time when California is already dealing with a budget deficit of $38 billion and is set to face a 17% increase in state Medicaid spending.
The Impact on Medi-Cal and its Beneficiaries
Flooding Medi-Cal with more beneficiaries may strain the state’s budget and impact the existing beneficiaries. Due to limited providers, the program already faces challenges in patient care. Only 70% of physicians accept new Medicaid patients, compared to 90% of providers accepting new patients with private insurance. This issue is due to Medicaid’s low reimbursement rates, which are 30% lower than Medicare.
Medicaid recipients are less likely to schedule regular appointments, leading to more emergency room visits. Adding more beneficiaries to Medi-Cal may further exacerbate these issues.
Alternative Solutions
For broader access to quality care, California could consider lifting its ban on short-term plans. These can cost up to 70% less than options on Obamacare exchanges. Private insurance options could deliver affordable care, and lawmakers should explore these instead of overburdening Medicaid programs.
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