Some big changes are coming to Medi-Cal, California’s Medicaid health care program for low-income people, next year.
Starting Jan. 1, two groups of people that had not been eligible for full-scale Medi-Cal will gain access: low-income adults ages 26-49 and some people who are disabled or older than 64. On the other hand, some current Medi-Cal enrollees will lose coverage as the state finishes unwinding the federal “continuous coverage” program that kept people on Medicaid in the pandemic, even if they no longer qualified.
Meanwhile, about 1.2 million Medi-Cal members in 21 counties — including more than 100,000 in Alameda and Contra Costa — will have to switch to a new managed health care plan on Jan. 1 because of a big shakeup in the state’s contracts with managed care providers.
“Full-scope” Medi-Cal provides free health, mental health, vision and dental care to low-income Californians. It also covers long-term care in the person’s home or a nursing home; Medicare generally does not. To qualify based on income, most adults can’t earn more than 138% of the federal poverty level for their household size. That’s $20,124 for an individual or $41,400 for a family of four.
About 15.3 million people, or almost 40% of the state’s population, are enrolled in Medi-Cal. That number grew by about 3 million during the pandemic.
The surge was partly a result of continuous coverage. Additionally, since January 2020, the California Department of Health Care Services — which administers Medi-Cal — has implemented various laws that let more people qualify for full coverage.
Here’s a closer look at upcoming changes.
Expansion for immigrants
Although Medicaid is a federal-state program, states cannot use federal funds to pay for full-scope Medicaid for non-citizens without what the state calls “satisfactory” immigration status. California, however, has been using state funds to phase in full-scope Medi-Cal for undocumented immigrants who meet its income and other requirements.
Coverage was expanded to children lacking permanent legal status through age 18 in 2016, to young adults 19 through 25 in 2020 and to adults 50 and older on May 1, 2022. As of August, about 670,000 people gained full coverage thanks to those three expansions combined, according to the California Legislative Analyst’s office.
Starting Jan. 1, adults between 26 and 49 will also qualify regardless of their immigration status, which could cover an estimated 700,000 more people.
Before they could get full Medi-Cal coverage, undocumented immigrants could get restricted-scope Medi-Cal, which is generally limited to emergency and pregnancy services.
Other states have expanded full Medicaid coverage to certain undocumented groups, but California will be the first to extend it to all, said Jennifer Tolbert, director of state health reform with KFF, a nonprofit organization focused on health care.
As of May, the department estimated that the age 26-49 expansion would cost the state $1.2 billion in 2023-24, nearly double the previous cost estimate of $635 million. “In the first full year of the expansion, we estimate costs to the general fund to be nearly $3 billion,” said Ryan Miller, the LAO’s principal fiscal and policy analyst. Reasons for the increase include new data showing that utilization and costs for prior expansions were higher than previously assumed, Miller added.
Continuous coverage unwinding
Normally Medi-Cal must make sure members still qualify every year, but for three years during the pandemic, in exchange for enhanced federal funds, states were not allowed to drop people from Medicaid.
This program ended March 31 and states gradually began unwinding continuous coverage. On April 1, Medi-Cal started to redetermine whether all 15 million members are still eligible and if they were not, disenroll them. That process will end on May 31, 2024, and “normal operations” will resume June 1, the department said via email.
It’s too early to tell how many members ultimately will lose coverage because people who are disenrolled have 90 days to prove they are still eligible and can be reinstated.
But from June through September, about 731,000 people, or 17% of those due for redetermination, had been disenrolled. Most disenrollments have been for “procedural” reasons, such as missing or erroneous paperwork. Only 5% lost coverage because their income was too high or they didn’t live in California.
The California Health Care Foundation predicts that the “vast majority” of those disenrolled will be eligible for other types of coverage, such as Covered California or an employer plan, but may need help transitioning.
Many members will be renewed without taking action. Before contacting members to complete a renewal, their county Medi-Cal office will try to verify them using outside sources such as electronic tax data or other state programs, such as CalFresh or CalWORKs. If the county can complete the renewal this way, the member will receive a notice that they were automatically renewed.
Members who are dropped from Medi-Cal but think they are still eligible should first contact their local Medi-Cal office or a Health Enrollment Navigator in their county.
If they were discontinued because of missing information and are still within their 90-day “cure period,” the county will work with them to restore coverage. If the county can’t reinstate them, they can file an appeal for a Medi-Cal Fair Hearing. For more information, see KeepMediCalCoverage.org.
Asset test eliminated
Historically, Medi-Cal had both income and asset limits. The Affordable Care Act removed asset limits for most people effective Jan. 1, 2014, but retained them for some groups in certain Medi-Cal programs. These include people with disabilities, those in nursing homes or using long-term care and those who are also on Medicare. For the latter group of “dually eligible” people, Medi-Cal covers costs that Medicare does not, such as premiums and copayments.
Before 2022, the asset limit for seniors and people with disabilities was extremely low — $2,000 for one person or $3,000 for a couple. Some assets do not count toward this limit, such as a primary home, primary vehicle and retirement accounts if the person is taking required minimum distributions.
Starting July 1, 2022, these limits were raised dramatically — to $130,000 for one person and $195,000 for two. On Jan. 1, the asset test will be eliminated but there will still be income limits, which vary by program.
“The asset limit increase allowed a larger number of applicants to become eligible for Medi-Cal benefits, and allowed current Medi-Cal members to retain a larger amount of non-exempt assets and still be eligible for Medi-Cal,” the department says on its website.
It’s unclear how many more people will qualify when the asset test is eliminated. “People with limited income tend to have limited assets,” said Alice Burns, associate director of KFF’s Program on Medicaid and the Uninsured.
The change “will also help people who are already eligible to enroll in and maintain their coverage because they will not be required to document their assets during the application and renewal processes. Eligibility is renewed at least once a year,” she said.
People who might be newly eligible because of the asset test elimination can get help from their local Area Agency on Aging or their county health office.
Managed care shakeup
Most people enrolled in Medi-Cal are in managed care plans, which typically require members to use health care providers within their network. The state contracts with a small number of plans — some public, some commercial — in each county to serve members of that county.
As part of a managed care overhaul, Medi-Cal put its contracts in all counties up for competitive bidding. As a result, some Medi-Cal members in 21 counties will have to change plans next year because their old one is exiting. In some of these counties, new plans will enter. But in others, members will simply have fewer choices.
“There will be more counties with only one plan,” said Chris Perrone, a director with the California Health Care Foundation.
As part of a separate deal with Kaiser Permanente to increase its Medi-Cal enrollment by 25% over five years, Kaiser will be available in 10 new counties next year. It is already available in 22 counties, including all nine in the Bay Area.
Unlike other plans, however, Kaiser generally accepts new Medi-Cal members only if they have been with Kaiser (perhaps through an employer or individual plan) within the past six or 12 months (depending on the county) or have a family member who is a Kaiser member. That won’t change next year, except the look-back will be 12 months in all counties. Also, current and former foster youth and people with both Medicare and Medi-Cal will be able to join even if they have neither prior Kaiser coverage or a family member with Kaiser.
In the Bay Area, the big change will be in Alameda and Contra Costa counties, where Anthem Blue Cross is exiting. In Alameda County, about 81,000 Anthem members will have to switch to the Alameda Alliance for Health — a public, not-for-profit agency — or to Kaiser if they meet the qualifications. In Contra Costa County, about 34,500 Anthem customers can choose the Contra Costa Health Plan or, if they qualify, Kaiser. Those losing Anthem have already been notified.
The Alliance and Anthem contract has about 92% of the same health care providers, said Matt Woodruff, the Alliance’s chief executive officer. As for the remaining 8%, if an Anthem member has seen a doctor or specialist in the past 12 months, and that provider is not in the Alliance’s network, the member may be able to continue to see that provider for up to 12 months by requesting “continuity of care.”
Medi-Cal’s managed care transition is also designed to improve patient outcomes by placing many new requirements on participating plans, such as reinvesting a portion of profits in their communities, increasing transparency, focusing more on primary care and having a chief health equity officer.
Kaiser direct
Another change is that, starting next year, Kaiser will have a direct contract with the state in all 32 counties where it offers Medi-Cal, which should help to streamline Medi-Cal members’ entry into Kaiser.
Currently, Kaiser has a direct contract with the state in five of its 22 counties, but in 17 others — including all Bay Area counties — it operates as a subcontractor through plan partners. In Alameda County, for example, Medi-Cal members would first go through the Alameda Alliance (the direct contractor) and then ask to enroll in Kaiser.
Next year, members will still have access to Kaiser doctors and facilities but will now deal directly with only Kaiser. “It streamlines entry into Kaiser Permanente,” said Kaycee Velarde, Kaiser’s executive director for Medi-Cal contracting and policy. Members won’t be getting “duplicate information or two IDs, and trying to figure out what to use.”
Existing members have been notified of the change and will get new ID cards. “It should feel like a very seamless transition,” she added.