In one of two plans he proposed for implementing the Affordable Care Act’s Medicaid expansion, California Gov. Jerry Brown has suggested that his state try something different: expand the low-income insurance program on a county-by-county basis.

Under Brown’s plan, outlined in his FY 2013-2014 budget, counties -- rather than the state -- would be the entities responsible for the fiscal and operational aspects of the expansion. They would have to meet some state minimums for eligibility (138 percent of the federal poverty level, the ACA’s new threshold) and the range of health benefits that would be covered (also tied to the ACA). But expansion funding would run through the counties, counties would enroll newly eligible beneficiaries, etc. They would be responsible for setting payment rates, processing claims and developing provider networks.

The county-by-county plan builds on a partial Medicaid expansion that California undertook in 2010. Under that program, called the Low Income Health Program, counties could choose to adopt the Medicaid expansion early, increasing eligibility to the 138 percent threshold, in exchange for a 50 percent federal match on the cost. According to Brown’s budget, Low Income Health Programs are already serving 500,000 people in 51 counties.

Brown also offered an alternative plan, which would simply be a statewide plan for people newly eligible under the expansion. Under both scenarios, the governor has proposed that the state or the counties would not cover long-term care for new enrollees.

His budget did not include cost or enrollment estimates for either scenario, as the expansion begins in January 2014, which is halfway through the 2013-2014 fiscal year. Brown did note, however, that counties currently spend an estimated $3 billion or more annually on health care costs for the expansion population through other county health programs.

“Increased coverage will generate substantial savings” for those counties, according to the budget.

Estimates from the Urban Institute and the Kaiser Family Foundation have projected that as many as 2.8 million Californians could be eligible for Medicaid under the expansion. The state is expected to spend up to $2.9 billion in state dollars by 2019, as the 100 percent federal match for the expansion starts to phase down in 2017.

Brown acknowledged that his state needs more federal guidance before determining if the county-by-county plan is feasible. It would also likely require a waiver from the federal Centers for Medicare and Medicaid Services.

California isn’t the first state where the concept of a county-level Medicaid expansion has been floated. Several urban Texas counties garnered headlines late last year when they suggested that they might seek federal funding to expand Medicaid within their borders, despite opposition from Gov. Rick Perry for a statewide expansion. At the time, some experts speculated that CMS might not have the legal authority to grant a county-level expansion.