‘There is nothing else’: Californians face eviction as insurer cancels assisted living benefit

Four weeks ago, Matt Johnstone received a call from the board-and-care facility in North Hollywood where his 89-year-old father lives. Health Net, the insurance company that pays for his care, was eliminating its assisted living benefit, meaning he would have to move out soon.

Johnstone panicked. His father has dementia and needs around-the-clock care. Neither Johnstone nor his brother can afford the roughly $6,000 per month the facility costs, and with health problems of their own, they can’t safely meet his needs at home either. Without insurance coverage, their father could end up on the streets, he said.

“He’s declining, and I just don’t know what’s going to happen if the program ends,” Johnstone said. CalMatters is not publishing the father’s name because Johnstone fears the plan will target him for speaking with media.

Health Net, one of the largest Medi-Cal insurers in the country, is canceling assisted living benefits for members at the end of the year, according to documents obtained by CalMatters and interviews with providers. Approximately 3,500 Medi-Cal patients like Johnstone’s father rely on Health Net to pay for assisted living costs. Most are elderly, and many have cognitive issues like dementia, senior advocates say. Medi-Cal is the state’s public insurance program for low-income Californians and people with disabilities.

CalViva Health and Community Health Plan of Imperial Valley, which contract with Health Net to provide services, have also notified the state of their intent to discontinue assisted living benefits.

Health Net’s decision has been shrouded in confusion with little public information. Senior advocates and family members of assisted living residents fear people will become homeless or be shuffled between hospitals and skilled nursing facilities.

Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, said a few assisted living facilities have already confirmed to her organization that residents have been dropped off at emergency rooms.

“This is going to be a disaster,” Shatara said.

Senior advocates also say the state did not include enough consumer protections to ensure patients stay housed if plans decide to terminate coverage. State regulators dispute that characterization.

The assisted living support is an optional Medi-Cal benefit, meaning plans can opt-into offering it to members and decide annually whether the program will continue. Assisted living support is part of CalAIM, California’s broad effort to improve Medi-Cal services and save money by stabilizing high-cost users who often end up repeatedly in emergency rooms. It pays a majority of the 24-hour service costs at board-and-care homes, memory care facilities, or larger group settings, while residents cover room-and-board fees.

The average nursing home, which offers a higher level of medical care, costs upwards of $10,000 per month , while an assisted living facility costs between $5,000 to $7,000 monthly.

The state created the benefit in part to relieve pressure on a separate assisted living program for low-income patients managed directly by the state, which has an 18,000 person cap and a three- to four-year waitlist.

Health Net operates Medi-Cal plans in 10 counties: Amador, Calaveras, Fresno, Inyo, Los Angeles, Mono, Sacramento, San Joaquin, Stanislaus, Tulare.

In an unsigned statement, a spokesperson for the company disputed the assertion that patients would be left without services and would end up unhoused. Affected members will receive care through their individual authorization date, and could be transitioned to nursing homes, back home with in-home supportive services, or to other programs, according to the statement.

“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 company statement said.

The statement also said internal data showed the assisted living program “has not led to better care” in terms of fewer emergency room visits or days hospitalized.

Health Net told state regulators its decision was fueled partly by an increase in members moving from home to assisted living rather than from nursing homes, a trend that costs the plan money instead of generating savings, according to a termination notice sent to the Department of Health Care Services. The plan also blames regulators for changing program guidelines that had previously allowed Health Net to limit community transitions.

“The guidance raises concerns regarding program integrity and long term viability,” the notice reads.

The Department of Health Care Services, which oversees the program, refused an interview request. In an emailed statement, officials said the department would communicate with Health Net to “ensure member protections and continuity of care”

Health Net’s decision follows a similar one last year to terminate a separate CalAIM benefit with a provider in L.A. County , affecting hundreds of people in temporary medical housing.

“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.

When Johnstone first heard about Health Net’s decision, he searched the company’s website for information about the change: Nothing. Then, he picked up the phone.

“When I called into Health Net customer service, they didn’t even know what the program is,” Johnstone said. He has not received a letter notifying him of the upcoming termination.

Jennifer Horcasitas-Glenn ran into the same problem. Her 75-year-old mother-in-law, Jacqueline Glenn, has dementia and Alzheimer’s. Horcasistas-Glenn and her husband spent nine years caring for Jacqueline at home until recent hospitalizations made it impossible to continue. She has been in a memory care facility since May.

Horcasitas-Glenn said she was also notified of the change by a third-party provider, not Health Net, and hasn’t gotten answers from the insurer. Horcasitas-Glenn said she spent days bouncing between customer service representatives and supervisors who had never heard of the program before being transferred to a Health Net social worker who was aware of the changes but had no further information.

“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 said. To-date she has not received answers.

The health plan notified some major contractors that services would be terminated Oct. 7, according to providers interviewed by CalMatters. But Medi-Cal enrollees themselves have not been notified of changes by Health Net, according to advocates and multiple families interviewed for this story.

One of the biggest sources of confusion is when services will actually stop. Many of the plan contracts end in October, but the plan has an obligation to continue services until 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, one of the groups whose contracts were terminated. Libertana subcontracts with hundreds of assisted living facilities in California, Istrin said, and Health Net doesn’t have the infrastructure to pay those places directly.

Health Net must notify members of termination 30 days before the service end date. Providers aren’t certain whether notices will go out at the end of September or beginning of December. For some, the notices may come after members are already evicted, Shatara said..

“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,” Shatara said.

On Aug. 10, Horcasitas-Glenn said she received a letter from Health Net stating that approval for her mother’s memory care facility would be revoked a month early “at the request of the provider.” The provider told Horcasitas-Glenn that they had not requested an early termination and had instead asked Health Net how to accommodate patients who have a right to services until the end of the year. CalMatters independently confirmed this information.

“This is baloney. They’re not being transparent about anything, and they’re lying on documents,” Horcasitas-Glenn said. Customer service still doesn’t know what program she’s talking about when she calls.

According to state regulators, Health Net members are entitled to services until Dec. 31 as long as it is “clinically appropriate.” If the authorization for a member’s assisted living expires before the end of the year, they should request an extension.

Other than the 30-day notice, advocates say, the state has very few protections for patients when services are terminated.

Health Net has not given patients transition plans, and the state cannot guarantee patients will receive the same level of care elsewhere, Shatara said. Advocates and providers told CalMatters the Department of Health Care Services and Health Net have mutually referred questions to the other organization, offering no clear answers.

The Department of Health Care Services in an email argued its patient notification requirements are adequate, stating “Medi-Cal members have strong protections.” Some patient protections include the right to appeal or file a grievance with the plan, access to alternative services, and continuity-of-care requirements. The state also places responsibility with Health Net.

According to the termination notice filed with the state, Health Net members “will be transitioned to alternative care settings, including home, as appropriate.”

For most patients, home is not an option, Shatara said. Many live on fixed Social Security incomes and give up their primary residence in order to pay room and board fees at care facilities that Medi-Cal doesn’t cover. Their needs are also too acute for family members to meet. The only other appropriate alternative care settings, Shatara said, are nursing homes and hospitals, which may not be able to handle the influx.

“It’s inevitable that people will end up in ERs and on the streets,” Shatara said.

Some families like Horcasitas-Glenn are contemplating switching to another Medi-Cal insurer that still provides the benefit, but have been told other plans don’t want to approve these expensive long-term services for new patients. Others, like Johnstone, are at a loss.

Johnstone’s dad turned a lifelong love of motorcycles and racecars into a successful autobody repair and restoration business in Southern California. Eventually, in his later years, undiagnosed dementia would trap his mind 20 years in the past, Johnstone said, causing him to make poor business decisions and take on enormous amounts of debt and work he could no longer perform. A terminal cancer diagnosis for Johnstone’s mother would also wipe out all of the family’s savings.

“There is nothing else,” Johnstone said.

This story was originally published by CalMatters and distributed through a partnership with The Associated Press.