Tuesday, January 10th, 2006


  • Increases to Education and Other Areas; Cuts to Low-Income Programs
  • Child Outreach Effort Restored; $72 Million for Enrollment and Retention
  • No Health Cuts, No Health Coverage Expansions for Children or Adults

Today, Governor Arnold Schwarzenegger unveiled his proposed $125.6 billion budget plan for the 2006-07 fiscal year, which includes $97.9 billion in proposed General Fund spending.

While the Governor announced the budget does not raise taxes, the budget maintains an estimated operating deficit in 2006-07 of approximately $6.4 billion. The Governor acknowledged that the operating deficit would not exist if had hadn’t made specific decisions, including to rescind the vehicle license fee increase earlier in his term, but that he stood by those decisions.

No major health cuts were announced. This was in contrast in other areas of the budget, such as parts of education, which got increases. Cuts were announced to some low-income assistance programs, most notably CalWORKS.

The full budget, with links to both the overall summary and specifics, is available at the website of the Department of Finance, at:

The detailed budget proposal of health care is available at:

NO HEALTH CUTS: The Governor’s proposed health budget follows the rule of, first, do no harm. The Governor’s budget does not include major cuts or program expansions in health care.

The only two savings proposals under the Department of Health Services was reform of the Adult Day Health Care Program and a freeze in count administration salary and overhead reimbursements, which would be a cut of $42.4 million (21.2 million general fund).

The only sginificant mention of the Governor’s “Medi-Cal Redesign” proposal from last year was the continued effort to move seniors and people with disabilities into managed care. Yet the budget “builds upon recommendations from legislators and advocates that DHS take a more cautious and deliberate approach to achieving this end.” So there is $2 million ($926,000 general fund) to work more to implement and increase enrollment in voluntary managed care for seniors and people with disabilties, as well as to initiate mandatory enrollment in two counties as a pilot project.

For links to various resources about the health budget, go to:

A full description of the Health and Human Services Agency budget is available at the Agency’s website, at:

CHILDREN’S HEALTH: In a press conference yesterday, and in his announcement today, the Governor focused on outreach, enrollment and retention of children into Medi-Cal and Healthy Families coverage. The budget includes $72.2 million ($3 million general fund) to restore programs to enroll the approximately 428,000 children that are eligible but not enrolled in public health insurance programs. The efforts include:

  • Providing up to $20.8 million ($9.1 general fund) in grants to counties for outreach and enrollment activities. (Note that this is less than the cut to county health care administration.)
  • Making the electronic application, Health-e-App, widely available and encourage application assistants and others to enroll children.
  • Continuing to offer incentive payments–$2.5 million ($1 million general fund)–to encourage Certified Applicant Assistants (CAAs) to continuously enroll more children in Medi-Cal and Healthy Families. (Last year’s budget restored these incentive payments after they were cut for two years.)
  • Providing $3.4 million ($1.4 million general fund) for a public education campaign, partnering with the First 5 California Commission to promote awareness of the Medi-Cal and Healthy Families programs.
  • Helping retain more children by simplifying the annual form needed to determine continued eligibility for Medi-Cal. The budget includes $45.5 million ($22.7 million general fund) for caseload growth.

While these are small but important steps to covering children, the Governor did not announce any expansions of eligibility. In his re-election year, the Governor is falling short of his campaign goal to cover all children, not offering an expansion to a single child. He vetoed a bill to meet that goal last year, and this relatively small investment in outreach won’t even get California half-way there. Around half of the nearly one million uninsured children are already eligible coverage, and so may benefit for this additional outreach, but the other half are left without coverage.

The Governor’s press release on this effort is available at his website, at:
A fact sheet is available at:

NO EXPANSIONS, OTHER MISSING ITEMS: The Governor did not include any proposal for health care expansion, to provide relief for the over 6 million children or adults that don’t have health coverage, or others with health care needs.

The budget also does not restore the health cuts of previous years and from the federal government, so the actual patients and providers could be worse off this year. Three examples:

  • Around one million low-income seniors (known as dual eligibles) are facing new co-payments and more restricted formularies for prescription drugs under Medicare starting January 1st of this year. This change was imposed by the federal Medicare bill some years ago, but some states are considering covering those costs to relieve this new burden on these vulnerable patients.
  • Also as of January 1, doctors are facing a 5% rate reduction for treating Medi-Cal patients, a cut that was made at the beginning at the budget crisis, which is just now being implemented, and which the budget proposal does not rescind.
  • Many safety-net hospitals have yet to get crucial federal funds as part of the new hospital financing waiver that Governor Schwarzenegger negotiated with the federal government. An important goal from last year was to hold these hospitals harmless, so that they don’t find themselves losing critical funds.

More information on the budget and its implications will be forthcoming in the weeks and months ahead.

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

Leave a Comment

%d bloggers like this: