#United States #California #Sacramento #Medicare #Medi-Cal

New California Medi-Cal Restrictions

As California approaches the implementation of new restrictions on Medi-Cal, concerns are rising about the potential adverse effects on patient care, particularly for those who are dual-eligible for both Medicare and Medi-Cal. The Center for Medical Economics and Innovation at the Pacific Research Institute, a nonpartisan free market think tank, has released a brief advocating for expanded competition rather than new government restrictions as the best method to control costs and enhance healthcare quality.

Dr. Wayne Winegarden, director of the Center and author of the brief, emphasizes that limiting healthcare choices is misguided. According to Winegarden, the prevailing assumption among California policymakers that restricting options will lead to savings is fundamentally flawed. The brief highlights how reduced competition may result in higher costs for taxpayers, lower quality care, and dire health outcomes. Winegarden argues that decades of research across various sectors indicate that increased competition is the key to driving down costs while raising quality and encouraging innovation in healthcare.

Recent studies, including one from the Commonwealth Fund, reveal the staggering cost of healthcare administration in the U.S., which amounts to about $1,055 per person. Winegarden points out that these high administrative costs stem from an inefficient payment model rather than from a multitude of choices available to patients.

California's CalAIM (California Advancing and Innovating Medi-Cal) program will soon introduce major limitations on private health plan competition for approximately 1.7 million residents who are eligible for both Medicare and Medicaid. Starting in 2026, new Medi-Medi patients will face severe restrictions, allowed access to only one or two private health plan options in their respective counties. For instance, residents of Alameda County will have Kaiser Permanente and Alameda Alliance for Health as their only providers starting January 1, while in Orange County, patients will only have CalOptima or Kaiser as options. Butte County will limit options even further, leaving residents with only Partnership HealthPlan.

These restrictive measures are expected to deny innovative insurers like Alignment Health, SCAN, and UnitedHealthcare the opportunity to serve Medi-Medi patients, even though these organizations were recently commended in congressional hearings for their quality-centered approach to care. Winegarden stresses that instead of excluding successful, patient-focused insurers, state officials should encourage a broader range of private plans to compete for Medi-Medi enrollments.

The brief argues that bureaucratic hurdles and regulations often lead to market consolidation, reducing choices for patients at a time when fairness and reliability in healthcare are paramount. Recommendations include surmounting state and federal regulations that hinder competition, specifically lifting limits that block private healthcare providers from expanding their reach to more customers.

"Effective markets thrive on transparency and competition," affirms Winegarden. He concludes that by fostering an environment where more healthcare providers can vie for patients, policymakers can unleash significant innovation. This approach not only enhances care quality but also makes healthcare services more affordable for both patients and taxpayers.

In summary, as California implements new Medi-Cal restrictions, the ramifications on patient care, access, and expenditures must be carefully examined. The journey towards an equitable healthcare system may rely more on competition and choice than on restrictive policies.