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Health reform to cost California $16 billion during upcoming decade Posted: April 8th, 2011

By Maryalene LaPonsie

Once the Patient Protection and Affordable Care Act (PPACA) is fully implemented, it will lead to medical coverage for six million Californians who are currently uninsured. That is one finding from a study recently published by RAND Health, a non-profit research organization.

The study is one of a series of reports commissioned by the Council of State Governments. Using a micro-simulation model, researchers analyzed how health reform policies will affect consumer access to government programs as well as private health plans.

In California, it was determined that sixmillion uninsured residents will have medical coverage by 2016 when all provisions of the PPACA will be implemented. The majority of those individuals - 58 percent - will become eligible for Medi-Cal, the state's Medicaid program. Another 17 percent will find medical insurance through a plan offered by the state's health insurance exchange.

Overall, the health reform provisions are expected to cost the State of California $16 billion from 2011 until 2020. This represents a 7 percent increase in state spending for health care.

Three other findings from the RAND Health analysis:

  1. The number of workers receiving medical coverage through their employers will decline slightly by 2016 as more small businesses drop employee health benefits.
  2. 96 percent of California's legal residents will be insured by 2016, compared to 80 percent today.
  3. 3.6 million new enrollees are expected to utilize the Medi-Cal program by 2016.