Friday, July 25th, 2003



As of this writing, the Senate is expecting to consider and vote on a budget proposal during a Sunday night session starting at 6:00pm, although that is subject to change. If that takes place, the Assembly is expected to start its consideration of the budget package on Monday.

HEALTH CUTS: While there is no written documentation that has been made public as of this writing, Health Access understands that the proposed Senate budget deal would cut just over $100 million dollars in Medi-Cal health insurance program, and would freeze some health care spending in next year’s budget. We will report further details when we get final documented verification.

* PROVIDER RATE CUT: The main cut is a 5% across-the-board rate reduction to providers in Medi-Cal (and some other programs like California Childrens Services and state-only Family PACT). Starting January 2004 and lasting for three years, this would mostly affect doctors, as long-term care providers and clinical labs are excluded. This adds up to a cut of $87 million general fund dollars. Over half of California’s doctors already decide not to serve the 6.5 million children, seniors, and people with disabilities on Medi-Cal; this will mean that it will be even harder for these patients to access a doctor or specialist.

* OTHER REDUCTIONS: Contrary to prior reports, NO Medi-Cal benefits will be eliminated. There are some cost-containment measures, including on hearing aids and on rental equipment, that each provide about a half-million dollars of savings. Other reductions are assumed, including a $6.2 million savings from better collection of child support for medical expenses, and a $6.1 million savings from the mental health portion of the EPSDT program.

* FREEZES NEXT YEAR: For the next budget year, in 2004-05, the budget would assume a freeze in Medi-Cal rates to long-term care institutions, Medi-Cal rates for hospital inpatient services, and the rates of Healthy Families vision, dental, and health plans. Given that health costs are expected to go up in double-digit figures, this translates into a significant cut and will have a real impact on access and quality of care to seniors, children, and all who use safety-net hospitals.

THE BOTTOM LINE IMPACT: The cuts made are serious: with the cut to medical providers, the 6.5 million children, seniors, and people with disabilities on Medi-Cal will have a harder time finding a doctor or specialist to serve them. These impacts will be worse next year, when additional cuts to nursing homes, hospitals, and the Healthy Families program come into effect.

FUTURE IMPACTS: By not raising revenues, the Legislature is simply postponing the worst of cuts for next year’s budget crisis, which already in projected to have a $8 billion deficit. By passing this budget, we have squandered an opportunity to ask everyone, including high-income earners, to share in the solution. While legislative leaders have appropriately stood against cuts that would directly deny needed care to California families, they are neglecting to use this opportunity to find a long term solution to the budget crisis–and remove the continued threat of additional health cuts in the imminent future.

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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