PRESS RELEASE

11/02/2010   GAAS:709:10   FOR IMMEDIATE RELEASE

Gov. Schwarzenegger Announces Agreement to Bring
California $10 Billion, Expand Coverage to Uninsured

Agreement Makes California National Leader in Implementing Federal Health Care Reform
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Governor Arnold Schwarzenegger today announced federal approval of California’s “Bridge to Reform” Medicaid waiver, which will help California prepare for and implement new federal rules that will take effect in 2014 under the Patient Protection and Affordable Care Act. The waiver will strengthen the state’s hospital safety net and delivery system and result in $10 billion in federal resources to expand health coverage for low-income uninsured residents and improve care for vulnerable populations.
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“I have long been committed to health care reform, and I am pleased that California is again taking the lead and setting an example for the rest of the nation in implementing reforms that will provide affordable and quality health care insurance to hundreds of thousands of currently uninsured Californians,” said Governor Schwarzenegger. “This agreement is great news for the people of our state because we will be able to expand coverage, improve the delivery of care and build a strong bridge to federal health care reform with increased federal resources.”
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Following more than a year of active negotiations with the federal Centers for Medicaid and Medicare Services on California’s Medicaid waiver, Schwarzenegger Administration officials achieved this agreement which will bring California roughly $2 billion a year in federal Medicaid support for the next five years. This investment more than doubles the investment over existing waiver levels and will allow the state to expand coverage to more uninsured adults by extending the current county-based Health Care Coverage Initiative, transition seniors and persons with disabilities into managed care plans, increase support for public hospitals through the Safety Net Care Pool and secure roughly $500 million in General Fund relief through federal support for state health care programs and workforce development programs.
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“The approval of this waiver is critical for the people of California,” said Health and Human Services Agency Secretary Kim Belshé. “The waiver will position us to better serve low-income populations without coverage today, support our state’s health care safety net and advance needed changes in our delivery system that will help position California to successfully implement federal reform.”   A federal waiver granted under Section 1115(a) of the Social Security Act permits states to pursue a range of program changes in an effort to deliver health care more effectively and efficiently, and to redirect the savings achieved to support service expansion and delivery system investment. For the past 15 years, this one-of-a-kind program has helped control hospital costs while protecting access to health care services and resulted in significant savings for both the state and federal government. The new waiver covers a five-year period, effective immediately.
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“We believe this waiver will help provide more effective and efficient health care to California’s most vulnerable populations and strengthen the capacity of our public hospitals to meet increasing demands for care,” said Department of Health Care Services (DHCS) Director David Maxwell-Jolly.   California’s waiver, officially titled California’s “Bridge to Reform: A Section 1115 Waiver Proposal,” advances the state’s health care goals in four specific areas:
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1. Expands Coverage to More Uninsured Adults

·         The waiver allows all counties to participate in the successful county-based Health Care Coverage Initiative. This initiative offers comprehensive benefits to low-income adults currently ineligible for Medi-Cal coverage, and DHCS estimates that as many as 500,000 adults aged 19 to 64 could enroll. Under the new waiver, counties participating in the initiative will immediately begin phasing in coverage for these childless adults. In 2014, these enrollees will transition into full Medi-Cal coverage or into the new California Health Benefit Exchange established by recent legislation enacted by the Governor under the Patient Protection and Affordable Care Act.
2. Ensures Funding to Support Access to Care

·         The waiver expands on the existing Safety Net Care Pool to provide payment for uncompensated care and ensure support for safety net hospitals and other critical state health programs that deliver services to the uninsured.
3. Improves Care Coordination for Vulnerable Populations

·         Under the waiver, up to 400,000 seniors and persons with disabilities will have access to more organized delivery of care in managed care plans, offering them more accountable and coordinated services and delivering improved health outcomes. ·         In later years of the waiver, the state will pilot organized systems of care for children with special health care needs to improve care coordination, consumer satisfaction, health outcomes and cost effectiveness.
4. Improves Quality of Care

·         The waiver establishes a Delivery System Reform Incentive Pool to support California’s public hospitals in transforming their delivery systems to improve access, care coordination and health outcomes of the patients they serve. Pool investments in infrastructure improvements and system innovation and redesign will be tied to hospital improvements in care coordination, quality and efficiency.

To learn more about the details of California’s “Bridge to Reform: A Section 1115 Waiver Proposal,” please click here. (pdf)