The Evolution of California’s Public Programs

The Evolution of California’s Public Programs


Medi-Cal began as health coverage for children and single parents, seniors and the disabled receiving cash assistance. MediCal had become an entirely different program, one dominated by low income working families, even before the advent of the ACA. The traditional “welfare” component of the program, called CalWorks in California, is now only 400,000 low-income children and parents, of its total 13.5 million program enrollees.[1] The evolution accelerated with the state’s implementation of welfare reform in the mid 90’s, and the steady growth in program enrollment under §1931b of the Social Security Act.

The Affordable Care Act (ACA) added more uninsured low income working adults – about 4 million new enrollees into Medi-Cal. It now covers 1/3rd of all Californians, half of all California children, half of all births, and over 2/3rds of all nursing home residents. Enrollment is far simpler and quicker; the unnecessary asset tests and the never-ending paper chase to secure all required verifications are for the most part gone for working families.

Medi-Cal started as a fee for service program. Mandatory managed care became the dominant MediCal delivery system during the 90’s, with only about 20% of the program’s most expensive eligibles still in the residual fee for service program.[2] Most decision-making is now done locally by the local MCOs, rather than at the state level, making it a more flexible and responsive program. Most provider reimbursement is through local contracts rather than by state rate setting. Then-Governors Pete Wilson and Gray Davis were the state’s leaders during this transformation of the Medi-Cal program and in the corollary reforms in commercial managed care plans for their programmatic abuses impacting private sector patients and providers.

Medi-Cal now uses a competitive model, offering a mix of public and private health plans; this started in the early 80’s but really blossomed during the 90’s. Each county selects and negotiates its preferred managed care option for MediCal with the state of California. Most California counties chose to offer a “public option” plan. Many have been strikingly successful. They are not yet performing at the level of the Kaiser Permanente Health Plan, the state’s premier managed care entity, while exceeding the performance of the other commercial plans.[3] A few of the county public plans participate and compete with the large commercial plans in Covered California as well,[4] but as yet they are nowhere near the successful market penetration levels they had achieved in Healthy Families.

Pregnant women and children. Prior to the ACA, California expanded eligibility to pregnant women and infants to 300% of the Federal Poverty Level (FPL) (AIM)[5] and for children to 250% of FPL (Healthy Families).[6] These programs were established during Republican Governor Pete Wilson’s tenure. They differed from Medicaid in having greater patient cost sharing, fewer protections for local safety net providers and plans, greater reliance on commercial private insurance, more outreach and enrollment assistance, less complex enrollment, and in general a more competitive model. They were a precursor for Covered California, California’s version of the federal Exchanges. They were somewhat more expensive than and eventually transferred into MediCal. 

Other specially tailored programs were developed for persons with AIDS, Breast Cervical and Prostate Cancer, Alzheimer’s, special health needs children and adults, family planning, tuberculosis, Victims of Violent Crimes, etc. The complexity of navigating these mini-programs and their interfaces with the larger programs was daunting; they each developed special provider and patient constituencies resistant to consolidation into a broader reform package.

Healthy Families was California’s leader in outreach, enrollment and continuity of coverage. It pioneered modern technology for application and enrollment, and it developed a network of local enrollers.[7] These features had been largely absent in MediCal, where the traditional enrollment system, with its paper based applications and welfare style rules and verifications, accompanied by an in person interview with a county worker, was still in place for adults prior to the ACA. Due to Healthy Families and local Children’s Health Initiatives, the state and many local communities had developed a local enrollment network and modernized enrollment system with crucial lessons already learned in reaching and communicating with immigrant communities, mixed status families and individuals with limited English proficiency.[8] This informed and guided the necessary evolution of the state’s application and enrollment processes under the ACA.


Prepared by: Lucien Wulsin

Dated: May 1, 2018




[1] California Governor’s Budget Summary 2018-19 at  

[2] Perrone, MediCal Enrollees Access to Care, Testimony to the Assembly Special Committee (January, 17, 2018) and Kelch, Overview of Care and Coverage in California, Testimony to the Assembly Special Committee, (Oct. 23, 2017) at at

[3] Ibid. Medi-Cal Managed Care Performance Dashboard (Dec. 2017) at

[4] LA Care and Valley Health Plan at


[6] By the time of implementation of the ACA, there were over one million children enrolled in Healthy Families (California’s version of CHIP) that were shifted into Medi-Cal.

[7] Kaiser Commission on Medicaid and the Uninsured, Comparison of Healthy Families and Medi-Cal Programs for Children in California (2000); Cousineau and Stevens, Trends In Child Enrollment in Children’s Health Insurance Programs (2009) and Use of Outreach and Enrollment Strategies in California (2009)

[8] Ibid.

Expanding Medicaid for the Uninsured Working Poor

Marshall Tuck for California State Superintendent of Schools