California announces Medi-Cal cuts

California plans to start cutting Medi-Cal payments. The state sought federal permission to reduce the amount of money it gives out to cover health care for the state’s low income residents. Under the terms of the plan the state will make a 10% cut in the amount of reimbursements it pays out, a move which could save the state millions but threatens the safety net for already struggling Californians.

State officials who asked for the cuts claim that by focusing on reimbursements they have preserved access to health care which they see as more critical. However, merely providing access doesn’t help residents already unable to afford care. California makes some of the lowest payments compared to states with similar programs and health care providers have noted that additional cuts will only exacerbate an already troublesome situation.

Rural health care providers and pharmacists are expected to feel the brunt of these cuts as more rural California residents are on Medi-Cal than those in more urban areas. Rural health providers and pharmacists are also often independent or with smaller practice groups unlike their urban counterparts which can spread the impact of the cuts thinly over a larger corporate practice structure.

The cuts are expected to be challenged in the court and may be successful – similar challenges blocked cuts in 2008 and 2009. The cut would save the cash strapped general fund over $600 million dollars but providers warn that despite claims to preserve access doctors and clinics may be cut in some of the neediest counties.

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