Monday, January 12th, 2004

ATTACHED is our Health Budget Cuts Scorecard, which not only details both the proposals by Governor Schwarzenegger and their impacts, but also includes the cuts that have been made in the last two years, to show the cumulative effect. As in previous years, we will update the scorecard as the proposals go through the legislative process.

FYI, the California Budget Project’s quick run-down of the budget proposal is at their web site:


Beyond the proposed mid-year cuts to Medi-Cal provider rate cuts and the enrollment caps to Healthy Families and other programs, the most significant news from the Governor Schwarzenegger’s budget proposal is the proposed federal waiver to “reform” or “redesign” Medi-Cal.

While it does not project savings from the budget in 2004-05, the administration is anticipating around $400 million in savings in 2005-06. This raises serious concern about the scope of this proposal. The vague language can be read as a reduction of eligibility, enrollment, and benefits, and an increase in cost-sharing on these low-income populations. The California Health and Human Services Agency says they *may* do the following:

* “Simplification” is described as “aligning Medi-Cal’s eligibility standards and processes” with CalWORKS and SSI/SSP.

+ This suggests reducing eligibility for children and families, as well as seniors and people with disabilities.

* “Multi-Tiered Benefit/Premium Structure” is changing Medi-Cal into a “tiered progam that provides comprehensive benefits to federally mandated populations and basic benefits to optional eligibles, with more comprehensive benefits available to those willing to pay premiums.”

+ This suggests either reducing benefits or raising costs for many low-income seniors, people with disabilities, and families.

* “Co-Payments” is “requiring co-payments from Medi-Cal beneficiaries.”

+ This suggests raising costs for low-income seniors, people with disabilities, and families.

* “Conform Benefits to Private Plans” is to “conform the basic Medi-Cal benefits package to that of private health plans.”

+ This suggests eliminating medically necessary benefits for all on Medi-Cal.

* “Managed Care Reform” is to “expand managed care into additional counties” and other items, including to “encourage enrollment of aged, blind and disabled into managed care.”

+ This is of great concern to those communities, which are frequent users of care.

It should be noted that $400 million dollars in state savings anticipated in 2005-06 is significantly greater than the combined savings sought from many of the worst cuts proposed last year, that were rejected by the Legislature, including: elimination of “optional” benefits including dental ($160 million), medical supplies ($55 million), and 12 other needed benefits ($60 million); institution of co-payments ($30 million); and imposing share-of-cost on tens of thousands of the aged and disabled ($63 million). If the Administration does not propose full elimination of the such benefits, as it is suggesting, how else will it attain such savings?

The Administration promises to “engage stakeholders, constituents, and the Legislature to help inform the design of these reform efforts.” While pleased with that spirit, health advocates are wary of this Medi-Cal “reform” proposal, and how such savings will be acheived without major impact on the health and financial security of the millions of Californians on Medi-Cal. Health Access will report when we have more information on this proposal and what avenues are available to provide input.

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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