Sunday, August 1st, 2004


* Worst of Health Cuts Again Prevented, Yet Threats Loom This Year and Next

* California Performance Review, Medi-Cal Redesign To Be Unveiled Early Next Week

* Announcements Will Have Significant Impacts for Health Care Consumers


One month after the start of the fiscal year, Governor Arnold Schwarzenegger yesterday signed a state budget (SB 1113) through June 2005. He hailed it as a “fair and responsible budget,” and used his line-item veto power on about 40 items totalling an additional $116 million–including a $20 million cut to mental health services for children. No major line-item cuts were in Medi-Cal or other specific programs of interest to health advocates.

The final budget message and information about the line-item vetoes are available at the Department of Finance, at: or more directly, here: (The Health and Human Services section starts at page 16. Line-item veto messages start at page 45.)

HEALTH BUDGET UPDATE: Unlike in previous years, when funding for health care programs and services were central in the final negotiations, the major proposed health care cuts were either rejected, withdrawn, or postponed months ago, including enrollment caps on various public insurance programs, and Medi-Cal provider rate reductions. The budget document cites some savings in health programs, from the result of anti-fraud efforts, delaying Medi-Cal checkwriting by a week, and other tactics. The adminisrations does budget for the administrative changes needed to, starting July 2005, increase premiums for children at 200-250% of the federal poverty level covered by the Healthy Families program. IMPLICATIONS

FOR NEXT YEAR: While once again the worst of the proposed health care cuts did not make it into the budget, health care advocates continue to be apprehensive. The budget still has a significant structural deficit, meaning that next year’s budget will have a deficit of billions of dollars. This will once again put pressure of policymakers to seek major cuts, especially in health care, a significant part of the state budget. The only way to prevent significant health care cuts in a sustainable way into the future is to raise new tax revenues.

NEXT WEEK: But advocates don’t need to wait long for the next announcement of proposed cuts and threats to health care programs and services. The Schwarzenegger Administration is set to announce major restructuring of both the Medi-Cal program and the whole state government as a whole in the next few days.


On Tuesday, the California Performance Review will release its 2,500+ pages of recommendations to restructure the California bureaucracy, as part of Governor Schwarzenegger’s effort to “blow up the boxes” in state government. Some details have already been revealed in the press, such as the elimination of over 12,000 state jobs and 118 boards and commissions.

In health care, the reports indicate that the various government bodies, including the Managed Risk Medical Insurance Board, Department of Managed Health Care, Office of State Health Planning and Development, Health Policy and Data Advisory Commission, Medical Assistance Commission would get folded into one large Department of Health and Human Services, with various divisions. In monitoring efforts, health advocates will be seeking to ensure that the functions and focus of these government entities are preserved to continue to provide health coverage and protect consumers rights. Health Access will work to put out an analysis of this plan as soon as it is officially released.

The plan encourages the privatization of various functions, including the enrollment of children in public insurance programs. The plan also seems to include other changes in both the enrollment, financing, and eligibility of Medi-Cal and other public insurance programs, as has also been advanced in the Medi-Cal redesign process. The Administration is slated to announce its intentions on Monday, August 2nd, with regards to its proposed Medi-Cal redesign, which would seek to save money largely by making Medi-Cal recipients pay more and face more barriers in getting the care they need.

While details are not available, it is clear that both the Medi-Cal Redesign and the California Performance Review potentially will have far reaching impacts on health care consumers, and health advocates should be vigilant.

Health Access California promotes quality, affordable health care for all Californians.
VIEW THE FILE Uncategorized

Leave a Comment

%d bloggers like this: