A large stuffed Pikachu peaked out of a duffle bag on Victor Valero’s hospital bed. 

“That’s my dialysis buddy,” he said. “Keeps me company.”

Valero’s kidneys failed in 2018 — a consequence of diabetes, he said. He spends three mornings a week tethered to a machine that cleans his blood. His diabetes also caused him to lose sight in his left eye, and he needed heart surgery last year. 

Why this matters

To maintain coverage, some Medi-Cal members are being charged their entire monthly income — except for $35. Advocates and state officials disagree over whether requiring some people to pay this “share of cost” is allowed during the public health emergency.

As his health declined, Valero, 47, said he had trouble holding down a job. He became homeless and bounced between hotels. In July 2021, Valero moved into the Park Anaheim Healthcare Center, a nursing facility that has given him stability, placing him closer to his kids and the dialysis center he depends on. 

Then in October 2021, Valero found out he would have to pay for the health care benefits he received through Medi-Cal, the state-run health insurance program for low-income people. The price: Nearly everything he earned each month. 

“I was angry. I was helpless,” he said. 

Medi-Cal members who end up in long-term care for 30 days or more can be required to pay for a portion of the care they receive. This “share of cost” can mean losing their entire paycheck except for a monthly “personal needs allowance” of $35. Those who end up in long-term care, perhaps after a devastating illness or injury, may still have other financial obligations, however, such as a car payment or storage fees, so advocates have long argued that the $35 per month they’re left with is unacceptable. 

“The only word I can think of is piddly,” said Alicia Emanuel, an attorney with the National Health Law Program, which advocates on federal and state health care issues. “There is a real impact to people who are low income.” 

Lawyers who spoke with inewsource said that adding a share of cost requirement for Medi-Cal members during the pandemic violates federal regulations, since state Medicaid programs are not allowed to take certain “negative actions” against Medi-Cal members during the public health emergency. 

State officials disagree. In a statement to inewsource, a spokesperson for the Department of Health Care Services wrote that while in many cases adding a share of cost is not currently allowed, “an exception is made for long-term care.” 

Despite that position, when legal aid groups have filed for hearings with an administrative law judge to address individual cases, the department has stepped in to remove the share of cost. The department wouldn’t explain why it has acted to eliminate the share of cost in some individual cases. 

Rather than address each case individually, advocates want the state to update its guidance to stop such transitions during the public health emergency, which is currently set to end this summer. 

Victor Valero sought legal help to fight the county’s decision to charge him a share of cost. Jake Harper/inewsource

“It is maddening that the policy issue can’t be addressed more broadly,” said Jack Dailey, policy director at the Legal Aid Society of San Diego. “If there’s a compelling reason to fix these individual cases, why isn’t there a compelling reason for the state’s policy to recognize the harm that can be caused?”

In response to an inquiry from inewsource, a spokesperson for the federal Centers for Medicare and Medicaid Services wrote that the agency is aware of the issues in California: “At this time, CMS is assessing whether any of the practices at issue are improper, and we will continue to work with the state on this issue.” 

Advocates like Dailey don’t know how many people have been newly forced to pay a share of cost during the pandemic, or what the consequences have been for those who don’t seek out legal help. 

inewsource has requested those figures from the state and is awaiting further information. In addition, inewsource asked the state how many individual cases before an administrative law judge it had been involved with. The spokesperson said the agency doesn’t track that information and referred that question to another department.

Courtney Brown said her mother ended up in long-term care in August 2020 due to a neurological disorder. Since she was unable to make her own medical decisions, Brown became her mother’s authorized representative and took over managing her Medi-Cal. Months later, she saw her mother was billed nearly $1,300 for her share of cost — almost her entire monthly income — but Brown wasn’t notified of the change by San Diego County.

“It’s such a punitive system that doesn’t even operate under its own rules,” she said. “If you don’t dot an i, they’re ready to cancel your case, but it seems like they can operate in violation of their own guidelines.”

In a statement to inewsource, county officials said they were unaware of issues with notification.

Brown decided not to pay, and eventually got in touch with the Legal Aid Society of San Diego. After a request from the state, San Diego County removed the share of cost. Though Brown’s case was resolved, she wonders what happens to the people who have been charged a share of cost and haven’t pushed back. 

“I don’t understand how they expect anyone to be able to battle through all the hoops,” she said. 

Medi-Cal, California’s Medicaid program, covers roughly a third of the state’s population, including millions who are low-income, elderly, pregnant, blind or disabled. 

Valero only found out about his share of cost through a conversation with Park Anaheim — his notice was sent to an old address. He said he paid his share of cost for a few months before realizing it was unsustainable. The $35 he was left with each month wasn’t enough for his living costs such as his phone bill, support for his two kids or any extra food he bought. His savings dwindled. 

“I was really feeling helpless that I couldn’t fix the issue…I was thinking even [of] moving back to Illinois and living with my dad, but that would mean leaving my children here,” he said. “It was really getting frustrating.”

During the ordeal, Valero sought help from Joan Chang, an attorney with Community Legal Aid SoCal. Chang said her organization has handled at least three share of cost cases, but emphasized the consequences for her clients have been devastating, and the real number of people affected by this issue is unknown. (Dailey said Legal Aid Society of San Diego has handled an additional three or four cases.)

“Sadly, we get these calls from folks who know who we are,” Chang said. “There are so many other … folks around the state who are experiencing this who are not reaching out.” 

Chang said one of her organization’s clients left long-term care to avoid paying the share of cost, only to end up in the hospital. “Some people are putting themselves in harm’s way,” she said. “A lot of these folks don’t know how to advocate for themselves.” 

After Chang filed for a hearing in front of a judge, the state stepped in to remove Valero’s share of cost. Failure to pay can result in eviction, and Valero said he could have ended up in the hospital if he had been forced to vacate. He’s grateful he found help. 

“I had been told ‘no’ so many times,” Valero said. “I’d probably be on the streets.”

Jake HarperINVESTIGATIVE REPORTER – HEALTH CARE

Jake Harper is an investigative data reporter, focused on health. Before joining inewsource, Harper worked at Side Effects Public Media in Indiana, where he reported on addiction, Medicaid and access to health care. His investigations have covered medical industry influence in state and national...