Thousands of low-income Californians who rely on Medi-Cal to cover assisted living costs are bracing for upheaval after Health Net, one of the state’s largest Medi-Cal insurers, announced it will end its assisted living benefit by the close of the year — a move advocates warn could push vulnerable seniors out of their homes and into emergency rooms.
For Matt Johnstone, the news arrived a month ago in a phone call from the North Hollywood board-and-care facility where his 89-year-old father has lived. Health Net, which has been covering the cost of his father’s care, told the facility it was dropping the benefit — meaning residents like Johnstone’s father would soon need to find somewhere else to go.
His father has dementia and requires constant supervision. Johnstone and his brother can’t afford the roughly $6,000 a month the facility charges, nor can they safely care for their father themselves. Without the Medi-Cal benefit, Johnstone fears his father could wind up homeless.
“He’s declining, and I just don’t know what’s going to happen if the program ends,” said Johnstone, whose father’s name is being withheld at his request out of concern that speaking publicly could affect his care.
According to documents reviewed by CalMatters and interviews with care providers, Health Net plans to eliminate assisted living coverage for an estimated 3,500 Medi-Cal members by year’s end. Most affected residents are elderly, and many suffer from dementia or other cognitive conditions, according to senior advocacy organizations. Two smaller plans that contract with Health Net — CalViva Health and the Community Health Plan of Imperial Valley — have also told the state they intend to end the benefit.
The decision has left families and providers scrambling for information, with many describing a chaotic rollout marked by conflicting messages and a lack of formal notice. Advocates worry that without a clear transition plan, some residents could end up bouncing between hospitals, skilled nursing facilities or, in the worst cases, onto the street.
Fears of a “disaster”
Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, said her organization has already heard from assisted living operators who say residents have been dropped off at hospital emergency rooms with nowhere else to go.
“This is going to be a disaster,” Shatara said.
The assisted living benefit is optional under Medi-Cal, giving health plans the choice each year whether to keep offering it. It’s part of CalAIM, the state’s initiative to modernize Medi-Cal and reduce costs by better serving high-need patients who often cycle through emergency rooms. The benefit covers most of the round-the-clock care costs at memory care homes, board-and-care facilities and similar settings, while residents pay for room and board out of pocket.
By comparison, a nursing home — which provides a higher level of medical care — can cost more than $10,000 a month, while assisted living generally runs between $5,000 and $7,000. The Medi-Cal benefit was created partly to ease pressure on a separate, state-run assisted living program that has an 18,000-person cap and a waitlist stretching three to four years.
Health Net operates Medi-Cal managed care plans across 10 counties, including Los Angeles, Fresno, Sacramento and Tulare. In a written statement, a company spokesperson pushed back on the idea that members would be left without care or become homeless, saying affected patients will continue receiving services through their current authorization period and will be evaluated for alternatives such as nursing home placement, in-home supportive services, or other available programs.
“We are working closely with members, providers and care management teams to develop individualized transition plans based on each member’s clinical needs and eligibility for other available programs and services,” the statement read.
The company also said its internal data shows the assisted living benefit hasn’t reduced emergency room visits or hospital stays among members who use it.
In a termination notice filed with the state Department of Health Care Services, Health Net said the decision was driven partly by a rise in patients moving into assisted living directly from their homes, rather than from nursing facilities — a trend the company says increases costs rather than generating savings. The insurer also faulted state regulators for revising program rules in a way that limited the company’s ability to restrict such transitions.
“The guidance raises concerns regarding program integrity and long-term viability,” the notice states.
The Department of Health Care Services declined an interview request. In an email, the agency said it would work with Health Net “to ensure member protections and continuity of care.”
This isn’t the first time Health Net has scaled back a CalAIM-related benefit. Last year, the insurer ended a similar arrangement with a Los Angeles County provider of temporary medical housing, displacing hundreds of patients.
“Their position is it’s less costly to offer no services than some services,” said Hagar Dickman, director of long-term services and supports for Justice in Aging.
Confusion reigns among families
When Johnstone first learned of the change, he checked Health Net’s website for details. He found nothing. Calling customer service didn’t help either.
“When I called into Health Net customer service, they didn’t even know what the program is,” Johnstone said. He said he has yet to receive any official notice about the termination.
Jennifer Horcasitas-Glenn had a similar experience. Her mother-in-law, 75-year-old Jacqueline Glenn, has dementia and Alzheimer’s disease. Horcasitas-Glenn and her husband cared for her at home for nine years before a series of hospitalizations made that impossible. Glenn has lived in a memory care facility since May.
Horcasitas-Glenn said she also learned about the benefit’s termination from a third-party provider rather than from Health Net directly. She said she spent days being transferred between representatives who had never heard of the program, eventually reaching a Health Net social worker who confirmed the change but had no further details.
“I told her I have a plethora of questions I need answered. She said, ‘I think you should forward all of your questions to this email,'” Horcasitas-Glenn recalled. She says she still hasn’t gotten a response.
Providers told CalMatters that Health Net notified some major contractors that services would end Oct. 7. But according to families and advocates, individual Medi-Cal enrollees have not received formal notice from the insurer.
Much of the confusion centers on timing. While many provider contracts expire in October, Health Net is required to continue services through the end of the year, Dickman said.
“The question is, what’s Health Net going to do after October 7? They don’t have contracts with these facilities, so how are they going to provide?” said Jonathan Istrin, chairman of Libertana, a company whose contract with Health Net was terminated. Libertana subcontracts with hundreds of assisted living facilities statewide, and Istrin said Health Net lacks the systems needed to pay those facilities directly.
Under state rules, Health Net must give members 30 days’ notice before ending services. But providers say it remains unclear whether those notices will go out in late September or early December — and Shatara warned that for some residents, the notice could arrive only after they’ve already been forced out.
“Right now it can feel like a rumor mill, and nobody knows what they should do because Health Net has not been giving anyone any information,” she said.
On Aug. 10, Horcasitas-Glenn received a letter from Health Net stating that her mother-in-law’s approval for memory care would be revoked a month early “at the request of the provider.” But the facility told her it had made no such request — instead, it had asked Health Net how to ensure patients received the care they were entitled to through year’s end. CalMatters independently verified this account.
“This is baloney. They’re not being transparent about anything, and they’re lying on documents,” Horcasitas-Glenn said. She added that Health Net customer service representatives still don’t recognize the program when she calls.
State officials say Medi-Cal members are entitled to continued assisted living services through Dec. 31, as long as the care remains “clinically appropriate,” and that members whose authorizations expire sooner should request an extension.
Few safeguards in place
Beyond the 30-day notice requirement, advocates say the state has done little to ensure members aren’t left without care once the benefit ends.
Health Net has not provided individualized transition plans for most patients, Shatara said, and the state cannot guarantee that displaced residents will find comparable care elsewhere. Advocates and providers say both Health Net and the Department of Health Care Services have repeatedly pointed to each other when asked for specifics.
In its statement, the department said existing consumer protections — including the right to appeal, file grievances, and access continuity-of-care provisions — are sufficient, adding that “Medi-Cal members have strong protections.” The agency maintains that responsibility for managing the transition ultimately rests with Health Net.
The insurer’s termination notice states that affected members “will be transitioned to alternative care settings, including home, as appropriate.”
But Shatara said returning home isn’t realistic for most patients. Many live on fixed Social Security incomes and gave up their previous residences to afford assisted living costs that Medi-Cal doesn’t otherwise cover. Their care needs are often too complex for family members to manage. That leaves nursing homes and hospitals as the only other options — facilities that may not have room to absorb a sudden influx of new patients.
“It’s inevitable that people will end up in ERs and on the streets,” Shatara said.
Some families are exploring whether switching to a different Medi-Cal plan might preserve access to the benefit, but Horcasitas-Glenn said she’s been told other insurers are reluctant to approve costly long-term placements for new members. Others, like Johnstone, say they simply don’t know where to turn.
Johnstone’s father spent much of his life restoring motorcycles and racecars, eventually building a successful autobody shop in Southern California. As undiagnosed dementia set in during his later years, Johnstone said, his father’s mind began slipping into decades-old memories, leading him to make costly business mistakes and take on debts he could no longer manage. A terminal cancer diagnosis for Johnstone’s mother further drained what savings the family had left.
“There is nothing else,” Johnstone said.
Original source: CalMatters
