State of California Redesign January 2005

Governor Schwarzenegger's agreement with the federal government to shift 554,000 elderly, blind and disabled people from Medi-Cal to HMOs is slated to occur in January 2007. Over five years, the administration can spend $18.4 million in Medicaid money to overhaul hospital financing in the state.

The redesign of Medi-Cal will require an investment of time and resources from state and county staff, health plans, the provider community and a broad array of stakeholders. Experience to date underscores the importance of a deliberate and gradual implementation so that systems and providers are ready and beneficiaries fully informed to understand the changes that will occur. For these reasons, implementation of the proposed reforms will take place over several years. 

When fully implemented, Medi-Cal Redesign will maintain and improve Medi-Cal coverage for eligible individuals and will reduce annual Medi-Cal expenditures by $287,180,000 ($144,902,000 GF). Savings over the first 5 years are expected to be $332,000,000 ($171,000,000 GF).