Amidst all of the criticism surrounding early implementation of the Affordable Care Act (ACA), there was, in fact, a bright spot. As soon as the ACA was signed into law, California developed a landmark initiative known as the Low Income Health Program (LIHP).

The program would go on to provide more than 660,000 low-income residents with health insurance in the lead-up to reform (2010–2013). In addition to exceeding enrollment goals, the program led to a more cohesive, integrated safety-net system across the state.

Blue Shield of California Foundation was one of LIHP’s earliest and most committed supporters. Over three years, the foundation invested more than $8.5 million in the program’s development, implementation, and evaluation.

On January 1, 2014, more than 90 percent of LIHP participants were seamlessly transitioned to Medi-Cal (California’s Medicaid program), and 4 percent were referred to the state’s marketplace under the ACA, Covered California, for enrollment in a qualified health plan. The other roughly 5 percent were not eligible or decided not to enroll in Covered California.

What Is LIHP?

California’s Low Income Health Program was made possible by the state’s Section 1115 Medicaid Waiver, also known as the “Bridge to Reform.” With the passage of the ACA, states were permitted to expand Medicaid eligibility immediately but were responsible for 50 percent of the costs related to expansion until January 1, 2014. The Bridge to Reform waiver provided California with up to $10 billion in early federal funding, making it possible for the state to expand its Medicaid program as early as November 2010 and begin making new investments in the safety net—particularly to reshape public hospital systems and community health centers.

How It Worked

The Low Income Health Program enabled California to lead the nation in efforts to enroll the uninsured into health care coverage. Given this head-start, the state made a concerted effort to carefully plan the program’s development and ensure its success. While the state was responsible for regulatory oversight and federal negotiations, LIHPs were developed and managed at the county level. By 2013, LIHPs had been established in fifty-three of fifty-eight counties in California. (Fresno, Merced, Stanislaus, San Luis Obispo, and Santa Barbara Counties did not establish a program.)

Blue Shield of California Foundation’s Role

The LIHP’s potential to improve health care coverage and access to care for some of the most vulnerable Californians is what attracted Blue Shield of California Foundation’s interest in the program. The foundation was deeply committed to supporting California’s health care safety net to (1) successfully implement the ACA and (2) expand access for the uninsured. Given this natural alignment in goals and mission, the foundation invested in a variety of activities that were fundamental to getting LIHPs off the ground.

Early in the LIHP development process, the foundation realized that many counties would need assistance to determine whether to create a LIHP, based on a clear understanding of the program’s parameters and the capacity required to implement it. In effect, to set up a LIHP, most counties had to create a temporary Medicaid managed care-like program. Most health departments had little to no experience running this type of program, which created a real risk that many counties would choose not to implement a LIHP simply because it was too complex.

To address this problem, the foundation provided support in a number of ways, including giving planning grants to twenty-two counties and one tribal organization, convening state and county leaders, providing technical assistance to the California Department of Health Care Services, and awarding implementation grants to fourteen counties.

The foundation also awarded several grants to the UCLA (University of California, Los Angeles) Center for Health Policy Research to work with the state and counties on data collection and evaluation of the LIHP. To date, six publications analyzing and assessing the program have been released. The most recent report reveals that LIHPs became powerful incubators for innovation and system redesign within the safety net. Data also show (1) a trend away from patients seeking high-cost emergency services, (2) greater integration of primary and behavioral health care, and (3) enhanced ability among safety-net providers to use data to improve quality of care.

Lessons Learned from the Program

Though a complex and ambitious undertaking, California’s LIHP was an unquestionable success. Lessons learned throughout the process are as follows.

Building a System

One of the most important outcomes was greater integration of safety-net providers. Every county that implemented a LIHP reported collaboration as essential to the success of its program. Riverside County, for example, deployed a team of case managers to guide collaborative efforts and train physician groups throughout the program.

Nine LIHPs encouraged coordination beyond the county provider network to include community-based organizations.

In many counties, LIHPs deepened the relationship between county health systems and behavioral health agencies, which historically have operated independently. Since the LIHPs’ essential benefits package included coverage for behavioral health care, the program created new incentives for county agencies to work together. Almost all LIHPs engaged in projects to improve the connection between primary and behavioral health care, including streamlined referral systems, access to electronic health records for both providers treating the same patient, and placing primary care and behavioral health staff in the same facility.

Creating a Culture of Patient-Centered Care

For the LIHPs to effectively manage care for their low-income residents, county officials had to rethink the way in which health care services were delivered. Using the medical home model, LIHPs assigned each participant to an individual physician or health center. Participating clinics reported holding team meetings to discuss individual patient care at least weekly. Many of these meetings also included nonmedical staff, such as social workers and health educators, to coordinate care across the system. Data show that this approach improves patient satisfaction and engagement.

Lessons Learned for Foundations

Blue Shield of California Foundation learned that effecting policy change at the state and county level was a high-risk strategy but delivered high rewards. Creating LIHPs required deep engagement with state officials and health agency directors in counties across California.

The foundation had the resources to maximize chances of success by investing in any county willing to contemplate creating a LIHP. In some places, like California’s Central Valley, an agricultural region of the state, poverty is concentrated such that there was great need for new coverage options for low-income adults, but resources for a LIHP in the counties in that region were minimal. Although ten counties in the Central Valley and Central Coast received LIHP planning grants from the foundation, five of them ultimately did not develop a LIHP because leaders in those counties decided that their county did not have the fiscal or staff capacity to invest in a new program.

Despite this failure in five counties, in other parts of the state, the LIHP investment by the foundation made a huge difference in achieving its goals of improving access to care for low-income Californians and strengthening the health care safety nets in those counties.

What Does the Future Hold?

California’s LIHP was a pivotal strategy in the state’s implementation of the ACA and one that required significant support from the philanthropic sector. Discussions around what will happen to LIHP’s remaining infrastructure continue, as stakeholders in the state look for ways to use the program as a model for addressing the needs of the residually uninsured—including the undocumented and others not covered by the ACA.

For funders, this presents an opportunity to invest and engage in promising projects that build off of LIHP’s lessons and success. The reexamination that the program catalyzed will continue to drive transformation of the safety net, and there is a clear role for grant-making organizations to help guide and support this work going forward.