News Release

HHS, California Reach Agreement on Important Medi-Cal Hospital Program

HHS Secretary Mike Leavitt and California Governor Arnold Schwarzenegger today have reached agreement on an important "Safety Net Care Pool" waiver and a series of reforms that will stabilize public hospitals, bring preventive, coordinated health care to vulnerable beneficiaries in its Medi-Cal program and allow the state to expand health coverage to more than 100,000 individuals who are currently uninsured. Medi-Cal is California's version of Medicaid, the federal-state health care program for people with limited incomes.

"Governor Schwarzenegger and I want to strengthen the health care system in California. This waiver will do that by helping the state cover more people at a lower cost, by moving them from more expensive hospital settings to programs that offer real benefits and a choice of services," Secretary Leavitt said.

This agreement will serve to stabilize the California safety net hospitals while the state moves forward on the Governor's Medi-Cal redesign to enroll more beneficiaries into managed care. In addition, the agreement provides for $540 million in federal funding over three years for a new coverage initiative to be developed to reduce the number of people who are uninsured.

The agreement enables California to secure Medicaid revenues, helping the state's public hospitals handle uncompensated care. As part of the agreement, California will also make some health care financing reforms to assure appropriate financing in the federal-state partnership.

"I want to thank Secretary Leavitt and his staff for their work with my administration over the past year to bring this necessary federal funding to California," Governor Schwarzenegger said. "This waiver advances our common goal of stabilizing and supporting the state's safety net, while at the same time making progress toward achieving important reforms in our health care delivery system."