California’s initial efforts to move almost 500,000 low-income seniors and disabled people automatically into managed care has been rife with problems in its first six months, leading to widespread confusion, frustration and resistance.
Many beneficiaries have received stacks of paperwork they don’t understand. Some have been mistakenly shifted to the new insurance coverage or are unaware they were enrolled. And a third of those targeted for enrollment through Nov. 1 opted out, indicating they will stick with their traditional coverage.
Prompted by the Affordable Care Act, the federal government is trying to streamline services and cut costs for the 9 million Americans who are in both Medicare and Medicaid. A dozen states have received grants to launch pilot projects, and five are enrolling participants – Virginia, Ohio, Massachusetts, Illinois and California.
Medicare and Medicaid are massive bureaucracies, each with separate rules. Medicare pays for most doctor visits and hospitalizations for the elderly and disabled. Medicaid covers nursing and other long-term care for the poor and the disabled.
Patients who qualify for both programs, including low-income seniors and younger people with disabilities, are known as “dual eligibles.” They have long been of concern, because they often have higher medical expenses and are more vulnerable than others. They are more likely to have Alzheimer’s, diabetes and mental health problems. Many see multiple doctors, sometimes receiving unnecessary medications or duplicative tests. The doctors mostly are paid a fee for each service provided.
Most of the states with pilot projects are opting to use some form of managed care, in which the government pays a health plan a set monthly rate to manage all of the patient’s needs. Patients generally are limited to seeing doctors who agree to participate in the plan’s networks and accept the negotiated fees.
California’s effort is the largest in the nation, and by many accounts it is not going well.
Ask Michael Williams, a 59-year-old Altadena, Calif., resident who has cerebral palsy. He said he has received several packets of information at his home, each more confusing than the last. The booklets didn’t make clear how his care would change or whether he could keep his pharmacist, physical therapist and the person who builds his leg braces, he said. Williams opted out because he feared he’d have to travel farther for medical care.
“I’m not physically up to that,” he said. “I’m scared this is just going to turn into a big mess.”
Beneficiaries say the information packets sent to them claim to offer “new choices” that will improve their care. But if patients or their authorized representatives don’t call or send in a form opting out, they are enrolled in the managed-care plans.
Doctors have been among the most vocal critics of the switch, and the state is having trouble getting some of them to participate.
“The scope and the pace are too large and too rapid for what is supposed to be a demonstration project,” said William Averill, a member of the executive board of the Los Angeles County Medical Association, which filed a lawsuit to block the project. “We are concerned that [the project] is ill-conceived, ill-designed and will jeopardize the health of many of the state’s most vulnerable populations – the poor, the elderly and the disabled.”
In theory, the projects nationwide have the promise of improving care by reducing unnecessary hospitalizations and inappropriate treatment, said David Grabowksi, health-care policy professor at Harvard Medical School. But in practice, the rollout across the nation has been slower than expected, in part because of the resistance of enrollees and providers.
Over the three years of the demonstration project, California is focusing on 456,000 of 1.1 million people in the state who qualify for both Medicare and Medicaid.
State officials acknowledge some transition problems but say the project will provide consumers with more coordinated care that improves their health, reduces their costs and helps keep them in their homes. Officials estimate the program could save the state more than $300 million in fiscal year 2014-2015.
California’s enrollment is occurring on a rolling basis in seven counties, including Los Angeles, the most populous in the nation. Among more than 322,500 eligible beneficiaries, 107,685 had opted out of enrolling in a managed-care plan as of Nov. 1.
Joyce Lest, 62, a resident of Tujunga, in northeastern Los Angeles, wishes she had. She said she received a letter saying she won’t receive an extra allocation for over-the-counter medications, as she did before.
“I signed up thinking they were going to help me,” said Lest, who has high blood pressure and advanced osteoarthritis. Instead, he said, “they are taking things away from me.”
The state has been besieged with questions. In September alone, there were nearly 50,000 calls to the state’s Health Care Services Department about the project.
Greg Knoll, executive director of the Legal Aid Society of San Diego, which runs the state ombudsman office for the project, said: “The phones were ringing off the hook . . . The rollout has been rocky.”
Toby Douglas, director of the California Department of Health Care Services, which is implementing the program, said the state is trying to address the problems quickly by expanding outreach and education.
Patrick Johnston, chief executive officer of the California Association of Health Plans, said that while it is of concern that some physicians are not interested, health plans still have been able to build comprehensive networks of primary and specialty care providers, and they are continuing to expand those networks.
“The state decided to go big from the outset . . . and now our job is to help make it work,” he said.
Kaiser Health News is an editorially independent program of the Kaiser Family Foundation.