More than 90% (14.1 million) of California‘s
15.5 million Medicaid program (“Medi-Cal“) beneficiaries are
enrolled in a managed care health plan. Seventeen of California‘s
managed care health plans are “local health plans“. With a long
history stretching back over 25 years, today these 17 local
health plans collectively cover 70% (9.9 million) of managed care
beneficiaries, making the local health plans‘ delivery system the
largest community-based, not-for-profit, and publicly accountable
one in the nation.
Beginning in the early 1970s, California started moving away from
the fee-for-service model and pioneering the use of managed care
in the Medi-Cal program. Local health plan, Contra Costa Health
Plan (CCHP), was formed by Contra Costa County leaders who wanted
a mission-driven and community-minded managed care plan option.
CCHP began enrolling Medi-Cal patients in 1973, making it the
first county-sponsored health plan in the state and federally
qualified HMO in the nation.
Similar to Contra Costa County leaders nearly a decade before
them, community leaders in Santa Barbara County wanted a
community and mission oriented managed care option and created
CenCal Health, California‘s first statutorily prescribed regional
health authority and County Organized Health System (COHS).
Following Santa Barbara’s lead, leaders in San Mateo County
established the second COHS managed care plan, Health Plan of San
Mateo, in 1987.
In the early 1990s, the growing Medi-Cal budget coupled with
continuing concerns about access to care led the state Department
of Health Care Services (DHCS) to develop a strategic plan to
expand the availability of managed care to a total of 20
counties. During this period, DHCS extended the reach of the COHS
model to an additional five counties with the launch of three new
COHS plans – CalOptima, Central Coast Alliance for Health (now
known as Central California Alliance for Health) and Partnership
HealthPlan of California (PHC).
DHCS also created two new types of managed care – Two-Plan Model
and Geographic Managed Care (GMC) Model:
The Two-Plan Model was implemented between 1996-1999
with twelve counties originally designated as Two-Plan
counties. Under this model, DHCS contracts with one local
health plan, a Local Initiative (LI), and one commercial health
plan. LIs were created to address concerns by community leaders
and safety-net providers that commercial health plans would not
be willing contract with them, putting the state’s safety-net
delivery system at risk. In 1994, San Francisco Health Plan was
the first LI plan launched under the Two-Plan Model.
The GMC Model was implemented in Sacramento County in
1992 and San Diego County in 1998. Under the GMC Model,
multiple health plans contract with DHCS to offer coverage to
Medi-Cal beneficiaries residing in San Diego or Sacramento
Counties. Community Health Group, formed by federally qualified
health centers in 1982, is the local health plan participating
in the San Diego GMC Model.
California continued to expand Medi-Cal managed care to
additional counties in the 2000s. Between 2001-2013, PHC expanded
to serve 12 additional counties. Similarly, CenCal Health
expanded into San Luis Obispo County in 2008. Central California
Alliance for Health expanded into Merced County in 2009.
Health Plan of San Joaquin, the LI in San Joaquin County,
expanded into Stanislaus County in 2013. In addition, 2009 saw
the creation of two new local plans: a new COHS plan, Gold Coast
Health Plan, to serve enrollees in Ventura County; and, CalViva
Health, an LI to serve Fresno, Kings and Madera Counties in the
All 17 local health plans share the same history and mission
of being community-based, not-for-profit, mission driven health
plans that emphasize transparency. They are grounded in the
communities they serve, maintaining strong ties to local
providers and consumers. Both the LIs and the COHS plans were
created with the expectation they would support local safety-net
providers and the populations they serve. As they have
since the earliest days of Medi-Cal managed care, the local
health plans continue to serve Medi-Cal beneficiaries in close
partnership with the safety-net and demonstrated dedication to
improving care delivery for California’s large Medi-Cal