Tuesday, June 17, 2003


* State Budget Proposal Would Make Further Cuts, Now and Into the Future

* U.S. Senate Considers Bad Medicare Prescription Drug Benefit


Assemblymen Joe Canciamilla (D-Pittsburg) and Keith Richman (R-Northridge) unveiled a budget proposal today. While they state in their press release that “because of its breadth, the budget rescue framework is unlikely to generate wide support in the Legislature,” it is viewed as a noteworthy development, given the current gridlock in the legislature. While it comes out of discussions with a larger group of Assembly representatives, they make it clear that this budget “does not represent other members of the Bipartisan Group.”

In terms of revenues, the proposal would enact the half-cent sales tax to pay for deficit bond retirement, but would reject the increases to the upper tax bracket and the tobacco tax, and the corresponding realignment of services. The budget package also includes a litany of “fiscal reform measures” including a spending cap, and an “economic stimulus package.” Assemblyman Richman has said to the Associated Press “that he knows of no other Republicans that are willing to support higher taxes at this time.” The press release and a letter providing some background from the Legislative Analyst’s Office is available at the Assemblymen’s websites:

SIGNIFICANT HEALTH CUTS: In terms of cuts, the proposal makes an additional $5.4 billion in reductions in 2003-04 over and above the Assembly budget, including an additional $1.4 billion in cuts to health care. The health care cuts include the following (with the savings of the cut in 03-04):

* Reduce Medi-Cal provider rates by 10% of general fund ($405M; $606M in 05-06). Assemblyman Richman maintains that with federal aid, this would be a 5% cut, but the document is unclear about this, and about the impact of the cut in future years.

* Rescind continuous eligibility for children ($58M; $193M in 05-06). This would endanger continuity of care for the 3 million children in Medi-Cal, and the loss of coverage for up to 471,500 children. Like ohter cuts proposed by Assembly Republicans, this is based on a suggestion by the Legislative Analyst’s Office.

* Eliminate specified Medi-Cal benefits ($23M; $36M in 05-06). Assemblyman Richman states this would not include medical supplies or durable medical equipment, yet this proposal would eliminate 10 benefits, including psychiatric, chiropractic, acupuncture, and podiatric services, occupational therapy, optician and optical lab services, optometry, hearing aids, speech and audiology services, and physical therapy.

* Restricting purchases by regional centers for people with disabilities ($50M; $101M in 05-06)

* Medi-Cal support enforcement program ($55M)

* Establish long-term care provider fees ($40M)

* Impose co-pays on Medi-Cal recipients ($31M)

* Reject specific funding for trauma centers ($10M)

* Exclude over-the-counter drugs from Medi-Cal coverage ($8M)

* Enroll new Medi-Cal applicants with disabilities in managed care ($1M)

In addition to this of cuts, the proposal would put in place a “spending cap” to “limit the growth in state spending to the increase in population and inflation.” It is unclear how this would differ from the current spending cap that California already has, which is based on population and inflation. Health care advocates should be especially worried about talk of spending caps, which could handcuff the state from meeting basic health needs into the future. Health care advocates should oppose anything that restricts the ability to meet needs created by economic recession, rising health care costs, bioterrorism and other public health emergencies, and not only a growing but an aging population that will require additional health care. ATTACHED are talking points against “spending freeze” proposals.

To express your opinion on their plan, contact: Assemblyman Joe Canciamilla, who represents parts of Contra Costa County, including Antioch, Martinez, Concord, Pittsburg, and San Pablo, at 916-319-2011; Fax: 916-319-2111. Assemblyman Keith Richman, who represents parts of Los Angeles and Ventura Counties, including Canyon Country, Northridge, Santa Clarita, Granada Hills, and Simi Valley, at 916-319-2038; Fax: 916-319-2138.


Last Thursday, the Senate Finance Committee passed a Medicare prescription drug bill, and the full U.S. Senate is starting to debate the bill, which is moving on a very fast pace. While hailed by some as a first step toward including a prescription drug benefit, many senior and consumer groups oppose the bill, on several grounds, including:

OPPOSITION TO THE PRIVATIZATION OF MEDICARE: The bill would create incentives for seniors to move out of Medicare and into private HMOs. For those who stay in Medicare, prescription drug coverage would be available only in stand-alone, privately-run drug plans. In the hearing, Center for Medicare and Medicaid Services Administrator Tom Scully himself said that such plans “don’t exist in nature.”

SUPPORT OF MEANINGFUL BENEFITS: Because of the tax cut and other spending priorities, the cost of this benefits has been limited, and thus the benefit is limited. Even with a $275 deductible and a $35 or higher monthly premium, this benefit would only cover half the cost of drugs up to $4,500/year, and nothing after that until $5,800. A senior with $1,000 of drug costs would actually pay more out-of-pocket. A senior with $2,000 of drug costs would have to pay $1,557.

CONTACT SENATOR BOXER AND SENATOR FEINSTEIN. Tell them not to oppose the Grassley-Baucus bill until they can come home and explain how this bill would impact seniors, people with disabilities, and other Medicare beneficiaries.

Senator Boxer is at 202-224-3553. Senator Feinstein is at 202-224-3841. Some senior groups are attempting to set up visits with Senator Boxer and Senator Feinstein in the next week or so, in Sacramento, San Francisco, and Los Angeles. Interested groups can contact Health Access to be part of these delegations.

Anthony E. Wright

Executive Director

Health Access

1127 11th St., #234, Sacramento, CA 95814

Ph: 916-442-2308, Fx: 916-497-0921

Health Access California promotes quality, affordable health care for all Californians.
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