California governments continue to plan for a new reality that will begin January 1, 2014, when the Affordable Care Act is fully implemented. In Los Angeles, the Department of Health Services is working to cover all contingencies while protecting access to quality care for those residents who already receive county services.

On Tuesday, the County’s Board of Supervisors received an update from Mitchell Katz, the director of the County DHS. His report and accompanying PowerPoint outlined options and challenges arising from Governor Brown’s 2013-2014 budget and how those can impact the DHS’s goals for reform.

The Governor had outlined two approaches to implementing the Affordable Care Act: a statewide approach and a county-level approach. Each presents its own challenges and opportunities, but common themes can be shared. First, the ACA was designed to expand accessibility and affordability of healthcare. Secondly, and perhaps most importantly to PublicCEO readers, both ultimately involve greater responsibility and risk for local governments, and especially counties.

Since 1991, the State has relied upon counties to deliver a wide variety of health services to some of the most vulnerable Californians. These basic safety net services could be expanded to include a greater number of Californians, or could be absorbed entirely into a state-level health care plan that would then be returned to counties to implement.

In either situation, arguably the most important question facing public health administrators is how to ensure a continuity of care – not only for those who already receive services, but also those who will be termed “newly eligible.”

Complicating the issue is that even once the ACA is fully implemented, California will continue to host millions of people who remain uninsured and will rely on county medical services.

As Dr. Katz explained in his presentation, there are potential pitfalls to having dually functioning safety-net healthcare systems. For instance, one household could have different family members enrolled in different healthcare systems, seeing different doctors, in different networks.

Even more confusing, however, could be complications related to “churning” patients. Churning describes situations where an individual bounces from one category of coverage and healthcare to another – either by changes in their economic status or their home life demographics. For instance, if a woman becomes pregnant, her Federal Poverty Level status changes and could thereby affect her eligibility for subsidized healthcare versus basic, county-level healthcare. In essence, she could be forced to switch providers at the exact time she needs continuous and consistent care.

According to studies, nearly 40 percent of individuals enrolled in a subsidized care plan could face changes to their economic status within 6 months – leading to similar changes in care.

For patients, these could be described as nightmare scenarios.

That’s why, in addition to Medi-Cal and Medicare expansions, the State and counties are looking to create “Bridge programs” that would allow these “churned” patients to continue to use the same doctors and networks, despite changes to their healthcare providers.

The state- and county-centric programs would be in addition to the State’s healthcare exchange – known as Covered California.

Covered California will eventually be the state’s online marketplace for individual healthcare. In addition to facilitating easier comparison-shopping for consumers, Covered California will also help connect lower-income individuals with subsidized care.

The range of the subsidy would vary based upon a percent of the Federal Poverty Level. Individuals earning up to 400 percent of the FPL could be eligible for some degree of tax subsidy, which would be paid directly to their provider on their behalf. The lower the income, the greater the subsidy an individual will receive.

Covered California will also host information about bridge programs.

The Governor’s budget included a placeholder $350 million to implement the ACA. That figure corresponds with costs presented by the CalSIM Model – created by UC Berkley and UCLA. They modeled take-up rates and associated costs under two scenarios – the first being a base expansion of Medicaid (which would include individuals earning up to 133 percent of the poverty line) and a model that would include expanded coverage up to 200 percent.

However, total cost may vary and funding sources could include counties’ 1991 Realignment funds. In Los Angeles, the Department of Health Services received $350 million in 1991 Realignment Funds in 2012-2013.

If the state pursues a statewide model, the Governor has already said that counties’ 1991 Realignment funding must be contributed up-front in the first year. In out-years, the Federal Government will help fund programs associated with the Affordable Care Act.

Between 2014 and 2016, Washington, DC will provide 100 percent of costs for low-income patients’ care, with percentages dropping to 90 percent by 2020.

Originally published Jan 15, 2013 at 5:00 pm