Brown Touts Calif.’s Embrace of ACA, Cautions About Health Costs

In his State of the State address on Thursday, Gov. Jerry Brown (D) touted California’s embrace of the Affordable Care Act, the Los Angeles Times reports (Myers, Los Angeles Times, 1/21).

According to AP/ABC 7,  Brown’s speech overall encouraged fiscal restraint, calling for funding to support existing initiatives — including some for health care — rather than pushing for new programs.

Brown Touts Health Care Programs

In his address, Brown noted that Medi-Cal, California’s Medicaid program, has expanded to 13.5 million beneficiaries under the ACA, while 1.5 million residents have enrolled in health plans through Covered California (AP/ABC 7, 1/21).

He said California has “wholeheartedly embraced the ACA.” He added that the coverage gains are “an historic achievement,” noting that “[i]t will provide health security to so many who could not otherwise afford it.”

Brown also said that California is leading the nation in how it provides home health service and creates jobs via the In-Home Supportive Services program.

Brown Warns About Costs

However, he cautioned that Medi-Cal and IHHS come with “enormous” costs (Office of the Governor release, 1/21).

Specifically, Brown said the state paid $15 billion for Medi-Cal in 2012. However that cost is expected to reach $25 billion by 2019. Meanwhile, state spending on IHHS is projected to increase by $2 billion to $9.2 billion over the next two years.

He said, “As the economic recovery reaches its end point and turns downward, it is crucial that we honestly face and plan for these increased costs.”

As such, Brown called on state lawmakers to “seriously consider” a plan in his fiscal year 2016-2017 budget proposal to replace the state’s expiring tax on managed care organizations, which could leave $1.1 billion in the Medi-Cal budget (Calefati, San Jose Mercury News, 1/21).

Under the plan, California would impose a new three-year tax on insurers, with rates varying by enrollment. According to the California Department of Health Care Services, the tax would generate about $1.35 billion (California Healthline, 1/8).

Brown said, “This is not a tax increase, no matter what anyone tells you,” adding, “The arithmetic is simple: California comes out a clear winner” (Office of the Governor release, 1/21).

Source: California Healthline