Medi-Cal’s Future Is Under Threat

Medi-Cal is getting squeezed with rising healthcare costs and increased demand for services while state revenues are declining, according to a report by the California HealthCare Foundation.

Medi-Cal’s share of the state’s General Fund spending grew from 17% to 19% in just two years. State lawmakers would have had to make much deeper cuts to Medi-Cal if not for the federal stimulus bill that gave the state $10 billion to $11 billion in additional federal Medicaid matching funds. The report includes the following facts about Medi-Cal:

* California spends 25% less than the national average per Medicaid beneficiary.
* Medi-Cal spending has grown 36%, per beneficiary, over the past decade compared to a 114% growth in private health insurance premiums.
* Medi-Cal spending is highly concentrated among a small subset of beneficiaries; just 10% of fee-for-service beneficiaries account for 81% of expenditures.
* Medi-Cal spending is growing fastest among adults with disabilities, with outlays for personal care services rising the fastest.
* Medi-Cal’s prescription drug spending has dropped since Medicare is now the primary source of drug coverage for beneficiaries eligible for Medicaid and Medicare.

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