I think it is admirable that California is attempting some innovative health care solutions and wish them the best of luck. If I understand their proposal correctly they will be billing the federal government the same amount but the spending will not follow standard Medicaid rules. With the waiver they will be using the savings from stream-lined health services to expand Medicaid. Since expanding Medicaid and streamlining care sound like two independent projects, my fear is that they will expand health care and fall short at getting the cost savings. History has shown that efforts like this are much better at expanding health care than cutting costs. If the cost savings do not appear, California or Medicaid is in the hole for an extra $2 billion per year.
The plan, which the state calls a “bridge to reform,” is also designed to bolster the state’s safety-net hospitals, as well as lower overall health care costs. Under the Nov. 2 agreement ”” a waiver of standard Medicaid rules aimed at allowing states to test innovative new programs ”” California promised to shave $2 billion per year from its existing Medicaid bill by streamlining care for its highest-cost recipients: seniors, adults with disabilities and children with severe illnesses. The federal government agreed to give California $2 billion per year in return.