California seniors face eviction as Health Net ends assisted living coverage

Key Takeaways

• Health Net will end assisted living benefits for about 3,500 Medi-Cal patients at the end of the year.
• Most affected residents are elderly and many have dementia or other cognitive conditions.
• CalViva Health and Community Health Plan of Imperial Valley also plan to drop the benefit.
• Advocates warn residents could be dropped off at emergency rooms or become homeless.
• Health Net says it will create individual transition plans for each member.

California families face an impossible choice

Matt Johnstone got a call four weeks ago from the board-and-care facility in North Hollywood where his 89-year-old father lives. Health Net, the insurer that pays for his care, was eliminating its assisted living benefit. His father has dementia and needs around-the-clock care. Neither Johnstone nor his brother can afford the roughly $6,000 monthly cost, and their own health problems prevent them from providing safe care at home.

Without insurance coverage, their father could end up on the streets, Johnstone said. "He's declining, and I just don't know what's going to happen if the program ends."

What Health Net is changing

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 rely on the plan to pay for assisted living costs. Most are elderly, and many have cognitive issues like dementia, senior advocates say.

Medi-Cal is California's public insurance program for low-income residents and people with disabilities. The assisted living support is an optional benefit under CalAIM, the state's broader effort to improve Medi-Cal and reduce costs by stabilizing high-cost users. It covers a majority of 24-hour service costs at board-and-care homes, memory care facilities, or larger group settings, while residents pay room and board.

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

Why is the company ending the benefit?

In a termination notice to the Department of Health Care Services, Health Net said the decision was fueled partly by an increase in members moving from home to assisted living rather than from nursing homes. That trend costs the plan money instead of generating savings. The company also blamed regulators for changing program guidelines that previously allowed Health Net to limit community transitions, raising concerns about "program integrity and long term viability."

An unsigned statement from Health Net disputed the idea that patients would be left without services or become 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, the statement said. The company also said internal data showed the assisted living program "has not led to better care" in terms of fewer emergency room visits or hospital days.

Local impact in Los Angeles County

The North Hollywood facility where Matt Johnstone's father lives is in Los Angeles County, one of the 10 counties where Health Net's Medi-Cal plans operate. Senior advocates say a few assisted living facilities have already confirmed that residents have been dropped off at emergency rooms. If the benefit ends without a safe alternative, more families could face eviction notices.

"This is going to be a disaster," said Pauline Shatara, deputy director of California Advocates for Nursing Home Reform.

Background: CalAIM and assisted living waits

The assisted living support was created in part to relieve pressure on a separate state-run assisted living program for low-income patients. That program has an 18,000-person cap and a three- to four-year waitlist. The average nursing home costs upwards of $10,000 per month, while an assisted living facility costs between $5,000 and $7,000 monthly.

Health Net's decision follows a similar move last year to terminate a separate CalAIM benefit with a provider in Los Angeles County, affecting hundreds of people.

What happens next

State regulators say they will communicate with Health Net to "ensure member protections and continuity of care." But senior advocates argue the state did not include enough consumer protections to keep patients housed if plans decide to terminate coverage. Regulators dispute that characterization.

Families like the Johnstones are now waiting for details about transition plans. "Operating under water" is how Johnstone describes the situation, with no clear path forward. The outcome could reshape how California cares for its most vulnerable seniors.