Why not expand Medi-Cal in California?

California’s Democratic-controlled Legislature has been an enthusiastic supporter of the 2010 federal healthcare reform law, but it has yet to take advantage of one of the most important provisions: the opportunity to offer Medi-Cal, the state’s version of the Medicaid insurance program for the poor, to more Californians largely at the federal government’s expense.

Gov. Jerry Brown hasn’t committed mainly out of concern about the potential cost to the state. There’s little doubt that the expansion would increase Medi-Cal costs over the long term, but the amount would be small in comparison to the state’s total Medi-Cal budget — and to the billions of dollars in new federal aid flowing to doctors and hospitals. The benefits to the public — including higher productivity, better health and fewer unpaid bills at county hospitals — more than justify the investment.

As part of a multilayered effort to make healthcare more efficient and effective, the 2010 law sought to extend insurance to millions of Americans without coverage. To reach the poorest uninsured, it called on states to extend Medicaid at least to those earning up to 138% of the federal poverty line — including able-bodied adults without children, who’d previously been ineligible no matter how low their incomes — starting in 2014. The feds’ share of the cost of the expansion would start at 100% for three years, then drop gradually to 90% by 2020. But as the federal Department of Health and Human Services announced Monday, that extra aid for any of the newly eligible would flow only if states expanded their Medicaid programs to the full extent called for by the 2010 law.

Expanding Medi-Cal would be a boon to providers that treat a large number of the uninsured and to county health programs, which now provide insurance (with federal help) to indigent adults without children. But the entire healthcare system would benefit too. Fewer uninsured patients means fewer costly trips to the emergency room. Doctors and hospitals would have fewer unpaid bills, and those with insurance would absorb less of those costs. And giving more people access to immunizations and other preventive care should improve public health and productivity.

According to the California Healthcare Foundation, more than 7 million Californians, or 22% of the state’s residents, were uninsured in 2011. That’s a higher percentage than in all but six states. Of that number, more than half would qualify for Medi-Cal if eligibility were extended to 138% of the poverty line. Make no mistake: The public pays the healthcare costs of this group one way or another. It makes sense to treat them in the most efficient and cost-effective way possible, and insurance coverage is a crucial element of that. The Brown administration’s caution is understandable, but if it properly weighs the costs and benefits, the case for expanding Medi-Cal seems overwhelming.