Penny wise, pound foolish

The state budget Gov. Jerry Brown signed last month is a solid one, thanks to increased revenues resulting from an improving economy, the temporary sales-tax hike voters approved in 2012, and the governor’s own fiscal prudence. But there’s one area where his prudence has become extreme and may end up costing more in the long run.

It has to do with Medi-Cal, the state’s Medicaid program, and the Affordable Care Act. The governor and the Democratic Legislature included $438 million in the budget to pay the state’s relatively small share of the cost of expanding Medi-Cal to 1.9 million previously uninsured people. But they balked at restoring a 10 percent cut, enacted in 2011 when the state’s finances were dire, to health-care providers’ Medi-Cal reimbursement rates.

California is now 49th among the states in the amount it pays physicians and other providers who treat Medicaid patients, according to Anthony Wright, director of the nonprofit Health Access California. Providers argue that the reimbursement rates make it financially unfeasible to treat Medi-Cal patients because the overhead is greater than the income.

As a result, more and more primary-care physicians are refusing to accept new Medi-Cal patients. According to the California HealthCare Foundation, only 57 percent of them accept new Medi-Cal patients, whereas they accept 75 percent of new patients with private insurance.

Medi-Cal beneficiaries “might have an insurance card and not be able to get into a doctor’s office anywhere,” Richard Thorp, the Paradise physician who is also president of the California Medical Association, has said.

Heretofore Gov. Brown has been a strong supporter of the Affordable Care Act. Now, however, his desire to save $250 million, the estimated cost of returning to pre-recession reimbursement rates, threatens to undermine the ACA by making it overly difficult for patients to find care. The governor is being penny wise, pound foolish.