Plans to Move Healthy Families Enrollees into Medi-Cal in California

As a result of changes to the federal Children’s Health Insurance Program (CHIP), the state of California is finalizing plans to expand Medi-Cal enrollment and eliminate its CHIP program, known as Health Families. Starting in Fiscal Year 2012-2013 , the state will begin to shift the 875,000 children currently enrolled in Healthy Family into Medi-Cal. This shift is likely to increase MAA claims for LEAs as a result of the increase in the size of the Medi-Cal population that they are serving.

The state of California continues to make changes to Medi-Cal in preparation for the full implementation of national health care reform. As established in the Patient Protection and Affordable Care Act (PPAC), California’s Healthy Families Program (HFP), which was established by the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), will be subject to new regulations in 2014. The state of California has determined that the new regulations are so similar to current Medi-Cal requirements that there is no longer any reason to maintain two separate programs.

As a result of this determination, in 2012 California will begin shifting the approximately 875,000 children currently enrolled in HFP into Medi-Cal. The state has released details about the plans for this transition in the governor’s proposed 2012–2013 annual budget.

It is expected that this shift is likely to increase MAA claims for LEAs as a result of the increase in the size of the Medi-Cal population that they are serving.

Additionally, California’s Department of Health Care Services (DHCS) presented a webinar about the transition on February 8, 2012. As explained in this presentation, HFP children will be transferred to Medi-Cal in three phases in coordination with the statewide implementation of Medi-Cal managed care. The first phase will begin 90 days after the enactment of the state’s annual budget.

The reported benefits of merging HFP into Medi-Cal include $91 million in savings to the state. These savings will be achieved largely through lower average provider rates and increased federal revenue for vaccines. The state also expects that the shift will provide increased access to mental health services through realignment of these services to counties. DHCS reported that no decisions have been made regarding potential changes to the role of Medi-Cal application assisters.

As the year progresses, Paradigm will continue to monitor and post updates on the development of this transition and any resulting impact on school-based Medicaid programs.