Politics & Government

California worries expanded health care will worsen budget woes

WASHINGTON — With Congress on the verge of passing a historic health care bill, Paul Phinney is happy to be working as a pediatrician in Sacramento these days.

"It's a very exciting time to be part of medicine," he said.

For starters, he says it'll be easier to treat patients if Congress makes it illegal for insurance companies to deny treatment for pre-existing conditions. And he says it would be good if those companies could no longer place a cap on how much they'll pay for medical services.

But he and many other California doctors worry that a soon-to-be-finalized health care bill could backfire and actually make things worse, making it more difficult for the poor to find doctors and sending more of them to emergency rooms.

They say that will happen if Congress does not increase reimbursement rates for doctors who treat patients under the state's Medicaid program.

The program, known as Medi-Cal, currently serves roughly 6.5 million poor Californians. And that number could increase by 2 million under the legislation pending in Congress. Congress wants to use the Medicaid programs as a way to cover more of the uninsured poor, reasoning that it's a relatively cheap way to go by relying on existing programs.

But doctors say that only a third of the state's 60,000 practicing physicians are participating in the program because of low reimbursement rates, and they fear that more of them will opt out.

"Increasing eligibility for Medi-Cal without increasing reimbursement rates would be catastrophic," said Brennan Cassidy, president of the 35,000-member California Medical Association. "There's no place for those patients to go for primary care because doctors aren't accepting them."

The doctors came to Washington to press their case last week. Gov. Arnold Schwarzenegger will follow with two days of meetings this week, warning that expanded coverage under the health care legislation could cost California from $3 billion to $4 billion a year.

The politics surrounding the issue are getting a little tricky to follow: While Congress is considering swelling the ranks eligible for Medi-Cal, Schwarzenegger wants to limit eligibility as a way to save the state money.

Currently, both the state and federal government share Medi-Cal costs, with each contributing roughly half. Under a bill passed by the House, state governments would receive 90 percent of their costs for expanding their Medicaid programs, while the Senate bill would pay for 85 percent. The governor is pushing for the federal government to pay the full cost for California, which has among the lowest reimbursement rates in the nation.

Schwarzenegger, who has worked closely with the White House on key issues in the past year, was one of the few Republicans who originally praised President Barack Obama's efforts to pass a health care bill. Now he's urging Congress to vote against it if more money is not included to pay for Medi-Cal and other unfunded mandates.

"While the governor has always been a strong supporter of health care reform, the legislation currently being debated in Congress will pile billions of dollars in additional costs on California," the governor's office said in a statement last week. It said that Schwarzenegger is promising to fight for "a permanent shift in the monetary relationship between California and the federal government."

In a letter to the California congressional delegation last week, Schwarzenegger said that the way the federal government calculates the reimbursement rate for Medicaid is "the single biggest inequity in federal funding." While the federal government pays half the cost in California, the governor noted that it pays 75 percent in Mississippi and 65 percent in Arizona. Altogether, he said, 38 states have higher reimbursement rates than California, which in effect means the Golden State's residents "are subsidizing the Medicaid program" in those states.

Cassidy, who works in cosmetic dermatology in Orange County, said it makes no sense that the governor wants to cut Medi-Cal costs while the federal government wants to increase the number of people served.

"I don't know who prevails," he said. "We're just all waiting to see the outcome."

If the federal view prevails, Cassidy said, there's no way California can handle another 2 million people on Medi-Cal, particularly with funding so uncertain. "The system can't sustain those numbers, and there's no guarantee that the state will continue to fund their portion," he said.

Cassidy, Phinney and a handful of other doctors flew to Washington last week to lobby members of Congress. They said it's impossible to know what might happen because House and Senate members are negotiating a final bill in private.

"I think it's going to be difficult for physicians to continue to participate in Medicare and Medicaid," Cassidy said. "The programs end up being unfunded mandates."

Phinney, chairman of the state medical association's board of trustees, said the physician shortage is being felt statewide, with Medi-Cal enrollees already twice as likely to show up in emergency rooms because they lack access to a primary doctor.

He's hoping that Congress recognizes how dire the situation has become as members put the finishing touches on their legislation.

"There's much that's very good in the bill," he said. "And I think that having people go into bankruptcy over health care costs is unconscionable in a country like ours. We can do better than that. ... All of us want something to happen."

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