Will California finally fix Medi-Cal gap for senior health care?

Gov. Gavin Newsom made a commitment two years ago to update a Medi-Cal rule that forces thousands of seniors and people with disabilities to choose between health care and paying for food and bills. 

The fix did not happen because of last year’s budget shortfall. Now aging and health advocates are back with a request to finally revise what they say is an unfair and outdated rule hurting some of the state’s most vulnerable residents.

Californians with significant medical expenses — but whose income is above the threshold to qualify for free Medi-Cal, the insurance program for low-income people — may still access the program with a share of cost that works similar to a deductible. This means they must foot a portion of their health care costs before Medi-Cal coverage kicks in. 

That share of cost, however, is unaffordable for most people who would benefit from coverage. It allows people to keep only about $600 of their monthly income for their basic needs and living expenses; the rest must go toward paying for their care. 

People who use this type of Medi-Cal tend to have costly care that isn’t covered entirely by Medicare, the federal insurance program for seniors and people with disabilities. For example, many seniors rely on both insurance programs because they need long-term in-home assistance, a service that is covered by Medi-Cal, but not by Medicare. 

“When people have a share-of-cost, they give up. They’re like, ‘This is ridiculous. How can I afford $1,300 a month when I only make $1,900 a month. I’m just not using services.’” said Kim Selfon, a Medi-Cal specialist with Bet Tzedek Legal Services, a nonprofit law firm that provides free legal assistance to seniors. 

Getting around the share of cost is possible, but it requires people to jump through bureaucratic hoops. For example, people can purchase supplemental health insurance or dental and vision insurance to buy down their countable income, and therefore qualify for “free” Medi-Cal.

“First, you have to find a legal services provider. You have to find out how much to purchase in health insurance. You find supplemental health insurance. Then you have to tell Medi-Cal that you purchased it. That is a lot of barriers for people, especially those with a cognitive impairment or no family,” Selfon said. 

The $600 “maintenance” amount an individual gets to keep hasn’t been updated since 1989, when the minimum wage was $4.25. Advocates have proposed raising what folks get to keep to 138% of the federal poverty level. Today that’s about $1,700 a month. 

The latest available data from the California Department of Health Care Services show that 61,307 seniors and people with disabilities were eligible for Medi-Cal coverage with a share of cost in January of 2023, but only 8% of those people met their share of the cost. That means the vast majority were not able to use their Medi-Cal coverage.

The budget Newsom signed two years ago included language to update this share of cost rule “if a determination is made in the spring of 2024” that the state can afford “these ongoing augmentations.” Last spring, California was looking at a two-year deficit of $56 billion, meaning this proposal was not funded and is now stalled.

Advocates say that if lawmakers are serious about tackling affordability issues this year as they have promised, this should be a priority. 

“It has been a disappointment for a lot of people,” said Tiffany Huyenh-Cho, a staff attorney with Justice in Aging, one of the organizations advocating for this change. “There was a light at the end of the tunnel that the share of cost was going to be fixed and more people would be able to access care, but due to budget reasons, it’s not happening, but the need is still there.” 

Advocates now are asking for $33 million in this year’s California budget and $80 million in ongoing funding to implement this change. The Newsom administration on Friday is expected to present its budget proposal for the upcoming 2025-26 financial year.

Because Medi-Cal is jointly funded by the state and federal government, updating the share of cost rule would also need federal approval. Advocates say they don’t see a Trump administration as a barrier to getting this change approved because other states already allow seniors to keep more of their income when accessing this type of coverage.

Nine states and Washington, D.C. allow this “medically needy” population to keep more of their income. In Illinois and Michigan, for example, seniors and people with disabilities get to keep closer to $1,000 a month for their basic needs. 

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.