Federal officials reject California’s plan to charge Medi-Cal co-payments The Sacramento Bee
February 10, 2012
Federal health officials rejected California’s bid to charge
Medi-Cal co-payments for everything from drugs to hospital
visits, dealing a new blow to the state budget but relief to
low-income patients and their providers.
Gov. Jerry Brown and lawmakers relied on mandatory Medi-Cal
co-payments to save $511 million in last year’s state budget and
presumed that the state would continue saving in future years.
The plan to charge low-income Medi-Cal patients and let doctors
refuse care for nonpayment was unprecedented for a state on such
a wide scale. The charges ranged from $3 for “preferred” drug
prescriptions to $5 for doctor visits and a maximum $200 on
hospital visits. Medi-Cal serves about 8 million Californians,
though patients also eligible for Medicare were exempt from
The state was required to obtain approval from the Centers for
Medicare & Medicaid Services (CMS) to implement its plan.
But CMS said in a letter Monday that it was “unable to identify
the legal and policy support” for the change. Under the Social
Security Act, a state must meet several tests in order to charge
co-payments, which include “providing benefits to recipients of
medical assistance which can reasonably be expected to be
equivalent to the risks to the recipients.”
Providers, such as physicians and dentists, and advocates for
low-income Californians warned that a co-pay plan would hurt
low-income patients by cutting access to health care. Providers
felt it was a back-door cut in reimbursement rates, on top of a
10 percent reduction that a federal judge recently blocked,
because the state put the burden on them to collect the co-pays
or make the decision to refuse patients for nonpayment.
Vanessa Cajina, legislative advocate for the Western Center on
Law and Poverty, said Medi-Cal patients would have stopped using
health care if faced with a payment requirement. She said
research shows that underuse of preventive health care, rather
than overuse of the system, drives up costs.
“When people with even a nominal co-pay are asked to pay $3 to
$5, they’re going to write off the health care system writ
large,” Cajina said. “These are children going in for checkups,
elderly people going in for care management. When you really
start thinking about a person on Social Security or a mom on
CalWORKs bringing in $800 a month, asking them to pay $5 is a
much bigger chunk out of their budget than it would be for other
The governor’s latest budget, which estimates a $9.2 billion
deficit, acknowledges the lost savings in 2011-12. But it is
relying on $575 million to help balance next year’s budget,
according to Department of Finance spokesman H.D. Palmer. The
administration will appeal Monday’s ruling with Health and Human
Services Secretary Kathleen Sebelius, Palmer said.