History & Mission


History of California’s Local Health Plans

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% (9.7 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 Central Valley.

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 population.