Transcript: HHS Secretary Diana Dooley’s press conference Q&A on the 2013-2014 California state budget

Diana Dooley, California Secretary of Health and Human Services

Partial transcript of press briefing Q&A with Diana Dooley, Secretary of Health and Human Services, on the 2013-2014 California state budget on Jan. 10, 2013: 

Question: How detailed are you at this point or how specific are you at this point in what you’re doing with the expansion or is that going to be special session decisions? Where are we at?

Diana Dooley: A couple parts to that question. The governor’s budget sets up a framework for the conversations that we have to have. There are many unanswered questions that he identified about the expansion, but the budget calls for the expansion. That the implementation of health care reform is bigger than coverage but the coverage piece about expansion.

The Medi-Cal expansion is characterized in the budget in two ways. There’s a mandatory expansion that is the expansion that will result from those who are currently eligible by virtue of the streamlined enrollment and re-determination process. It’s easier to get on Medi-Cal and to stay on Medi-Cal under the Affordable Care Act.

There will be an individual mandate that will take effect next year that will encourage people to enroll in a program and that will increase enrollment in the current – among the currently eligible.

And the Covered California – the health benefit exchange – will be doing extensive marketing of its product that will result in people being aware of coverage options.

So those three factors will combine to increase Medi-Cal under what we’re calling in the budget the “mandatory expansion” of existing eligibles.

The option expansion is the expansion to those who are not currently eligible – up to 138% of poverty.

The governor has laid out two approaches to achieve that expansion option.

One would be by an expansion of the state Medi-Cal program, and in that option there would be a conversation that has to begin with the counties that has been expected for a number of years as we have looked at increasing Medi-Cal coverage for those who are currently obligated by the counties to provide care through their 17,000 obligations to medically-indigent adults.

There will be savings that result to the counties from those – some of those going to the Medi-Cal program. And that conversation has to begin about the sharing of the risks and responsibilities between the state and the counties.

So if the state runs the expansion – provides care under the state program to the expansion population – there will have to be a trade-off of risk and responsibilities with the counties’ budget – suggest that might be child care but it will be some social service that they will accept responsibility for and we will take responsibility for the covered glides that they now have under their obligation.

The other alternative to the expansion of Medicaid – of Medi-Cal up to 138% of poverty is by expanding the low-income health programs that started under the bridge to reform waiver. There are approximately $550,000 people in the counties now who are getting coverage in anticipation of the expansion.

An option would be to standardize that program and bring all of them to the 138% of poverty and meet the streamlined eligibility and enrollment and the waivers would have to be extended with the federal government that allow that program in the first place.

So that is the framework that is set out in the budget for discussions that we will have with the counties over the expansion of the newly-eligible 138% of poverty.

Question: [Inaudible]…the newly-eligible. What the level of coverage is going to be? Is it going to be what is currently in Medi-Cal? Is it going to be more?

Diana Dooley: The benefits are suggested in the budget to be the same as the current Medi-Cal benefits with the exception of long-term care. Long-term care would not be a part of the benefit package for the newly-eligible.

Question: Do you have a better sense yet of what you need to accomplish…? [Inaudible] We have such different figures from the Kaiser Foundation versus U.C.

Diana Dooley: I think there is as many estimates as there are estimators at this point. That’s in part because it is so complex and there are so many moving parts and the assumptions that are made drive the different estimates. We have included in this budget $350 million as a placeholder number for the mandatory expansion – for that expansion that will result in the existing eligible. But that, too, is a placeholder number. There’s a wide range on that.

The federal government hasn’t yet issued its rules on claiming for how they will determine who’s a current eligible and who’s a new eligible.

Of course, the new eligibles we get 100% funding. Of course, that is if they don’t make a change around the debt ceiling issues – the 100% for three years or 50% if they are determined to be an existing eligible.

But these are just a few of the variables that affect the estimates. So that’s where we are in the estimate.

Question: The single adults up to 138% – is there a commitment in this budget to enroll those people in Medi-Cal or is that still being worked out?

Diana Dooley: Yes, it would be Medi-Cal. Whether it is a state-run Medi-Cal program or a county-run Medi-Cal program for the newly-eligibles, which would be an expansion of the Low-Income Health Program which is a Medi-Cal program run by the counties. So it would be Medi-Cal for 138%…

Question: And on the trade-off, there’s some discussion previously about reducing the 91 realignment payments to counties…?

Diana Dooley: That’s the conversation that we have to have with the counties over how we will finance this over the long-term.

This fundamentally changes the relationship between the state and the counties for the long-term. And the 91 realignment money is very complex. For me, it’s a black box. Ana knows it backwards and forward. But there are a complex set of funding mechanisms that go into the 91 realignment, and the conversations that we’ll have about their taking over services will be in the mechanism for affecting that shift in cost and responsibility.

Question: Does this budget assume a savings from the state payments to counties either one way or another? Or does it just assumes all the money stays the same?

Diana Dooley: Yeah.

Ana Matosantos: As Diana mentioned, the budget assumes $350 million in costs next year. Assumes – that’s a half year cost. Assumes $700 million that’s associated with the mandatory expansion. It lays out the two different options and under one of the options as Diana mentioned, if the state expands Medicaid at the state level and there’s a shift, then there would be programs that would move in the other directions. So it would be a trade of costs from one from the other.

Question: Is there an MCO tax proposal in here?

Diana Dooley: Yes. The budget assumes that we will propose the continuation of the tax on the managed care plans.

Question: [Inaudible]

Diana Dooley: Yes, the Healthy Family transition has begun and we’ll continue to move those children into the Medi-Cal program.

Question: [Inaudible]…away from that 100% funding of the optional expansion as you’re calling it?

Diana Dooley: Well, you know, the negotiations that they will engage in are complex as well. The President did in 2013 – in 2011 propose a blended rate. They have now withdrawn that as a proposal. I think it’s almost impossible for us to speculate what factors they may consider. They have been committed to the sequester terms that keep Medicaid out of the reductions. Certainly, if that occurs, we can proceed as is anticipated. If there are changes to that, then we have to look at the impact on us if that changes.

I think they’re committed. They said they’re committed. I appreciate that but we all know when you get into a negotiation there are things that have to be on the table that aren’t on the table now.

Question: [Inaudible]…short-term or is it more of the out-years where the federal government declines and you pick up more of the costs?

Diana Dooley: Well, my concern is both in the short-term and in the long-term because how this rolls out. We have to roll it out in the short-term in a way that you can sustain it in the long-term. And so the sooner we know what the long-term is going to look like, the better prepared we are to plan for that in how we design it.

As we all know, when we start down a path it’s very hard to get off of it and so I think we have to be very cautious about how we design this in the short-run that either provides the flexibility to move in the longer run or that we can certainly sustain it.

Question: So do you have to work out the extension model with the counties before you can then get legislation to expand it?

Diana Dooley: Well, we’ll be working – as you know, the governor indicated in his summary that he would call special sessions for those issues that needed immediate attention in order to keep us on a path to implement health care reform by January 2014. He is working with the legislative leadership about that special session, and I expect that it will be called sometime before the end of the month. The governor and the legislature will work with each other cooperatively to determine what issues should be addressed in the special session that are ready to be addressed in the special session and which issues are going to need more time. So I think by the end of the month there will be more clarity about it.



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2 Comments on “Transcript: HHS Secretary Diana Dooley’s press conference Q&A on the 2013-2014 California state budget

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