No-Bid Medicaid Contract for Kaiser Permanente Is Now California Law, but Key Details Are Missing

by | Jul 19, 2022 | Health

[Editor’s note: KHN is not affiliated with Kaiser Permanente.]

California lawmakers have approved a controversial no-bid statewide Medi-Cal contract for HMO giant Kaiser Permanente over the objection of county governments and competing health plans. But key details — including how many new patients KP will enroll — are still unclear.

On June 30, with little fanfare, Gov. Gavin Newsom signed the bill that codifies the deal, despite concerns first reported by KHN that KP was getting preferential treatment from the state that would allow it to continue enrolling a healthier pool of Medi-Cal patients, leaving other health plans with a disproportionate share of the program’s sickest and costliest patients. Medi-Cal, California’s version of Medicaid, the government-funded health insurance program for people with low incomes, covers nearly 14.6 million Californians, 84% of whom are in managed-care plans.

Now that the debate is over, opponents of the KP deal are looking ahead.

“We look forward to working with the state on implementing the statewide contract, and we will continue to advocate the value and importance of local plans in providing care to their communities,” said Linnea Koopmans, CEO of Local Health Plans of California, which spearheaded the opposition.

Kaiser Permanente is a huge player in California’s health insurance market, covering nearly a quarter of all Golden State residents. But its slightly less than 900,000 Medi-Cal enrollees are only about 7% of that program’s total managed-care membership.

Kaiser Permanente has long been allowed to limit its Medi-Cal membership by accepting only people who have been KP members in the recent past — primarily in employer-based or Afford …

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