For the second year in a row, both the Assembly and Senate budget subcommittees have failed to provide funding for Medicare Part D co-payments paid by low income seniors and persons with disabilities.

  • No money included by either house to help the state’s poorest seniors and people with disabilities afford their medications
  • Patients with monthly incomes of less than $850 could be forced to pay $40 or $50 out-of-pocket for medications
    • ACTION ITEM: Call Legislative leaders and budget committee members to express your discontent and urge reconsideration of this issue
  • Assembly Budget Subcommittee rejects governor’s modest proposal to cover uninsured children in favor of Assembly version to phase-in coverage for all children below 300%FPL.

Among the top priorities for advocates this year was to fix problems associated with the complicated and confusing federal Medicare Part D program. In addition to the disastrous implementation problems, advocates sought to protect the lowest income patients in California, who faced out-of-pocket co-payments for the first time under the new plan.


Lawmakers have decided not to spend one thin dime to help the state’s most vulnerable residents pay for their medications.

The Senate shut down its health budget subcommittee on Friday with nary a mention of the $76 million it could cost to cover the co-pays of seniors and disabled people who are enrolled in both Medi-Cal and Medicare.

In the Assembly, subcommittee chairman Hector DeLaTorre heard testimony about the issue two weeks ago and seemed sympathetic. But DeLaTorre closed the book on the health portion of the budget without a single penny going to cover the co-pays.

In California, 1.1 million seniors and people with disabilities were enrolled in both Medi-Cal and Medicare. When Medicare Part D took effect in January, these dually eligible patients found they were worse off. The patients, who live on $834 a month, were unceremoniously shifted into the program on January 1, 2006 and forced to come up with $1 to $5 co-pays for each medication. If they did not have the money, a pharmacy could refuse to fill their prescription.

Previously, Medi-Cal covered the full cost of their drugs with no co-pays. These dually eligible seniors use an average of 10 medications a month and can least afford $10, let alone $50 for their medications to stay alive.

Because neither house has included this funding in their budget, it means the issue is effectively dead for the year. Because neither subcommittee included any funding, this item will not be heard in the budget conference committee.

For action to occur this year, legislation would require a two-thirds vote in both houses and the signature of the Governor in order to appropriate funds. The four legislative caucuses, the four legislative leaders, and the governor would need to agree—as yet, none of them, not one leader, not the Governor, has supported this effort.

In light of the unexpected $7.5 billion revenue windfall the state received, it is hard to believe that the resources could not be found to support a $76 million budget proposal to pay for co-payments.

With $65 million earmarked for Medi-Cal HMOs, many health advocates are deeply troubled by the actions of the federal government and lack of action by state government that leave the most vulnerable Californians are now worse off than they were just five months ago under Medi-Cal.

ACTION ITEM: Express your discontent. Urge reconsideration.

Let Legislative leaders know how their inaction will affect the most vulnerable in California.

Assembly Speaker Fabian Nunez
California State Assembly
State Capitol, Room 219
Sacramento, CA 95814
Phone: 916.319.2046, Fax: 916.319.2146

The Honorable John Laird
Assembly Budget Chairman
California State Assembly
State Capitol, Room 6026
Sacramento, CA 95814
Phone: 916.319.2027, Fax: 916.319.2127

The Honorable Hector DeLaTorre
Chair, Assembly Budget Subcommittee #1
California State Assembly
State Capitol, Room 4162
Sacramento, CA 95814
Phone: 916.319.2050, Fax: 916.319.2150

Senate President Pro Tem Don Perata
California State Senate
State Capitol, Room 205
Sacramento, CA 95814
Phone: 916.651.4009, Fax: 913.327.1997

Senator Wes Chesbro
Chair, Senate Budget Committee
State Capitol, Room 5035
Sacramento, CA 95814
Phone: 916.651.4002, Fax: 913.323.6958

Senator Denise Ducheny
Chair, Senate Budget Subcommittee #3
State Capitol, Room 4081
Sacramento, CA 95814
Phone: 916.651.4040, Fax: 913.327.3522

The remaining alternative is to draft a bill requiring action on co-payments, but this measure would need to reach the high bar of a 2/3 vote in both the Assembly and the Senate and the signature of the governor.


Also on Monday, members of the Assembly budget subcommittee rejected Gov. Arnold Schwarzenegger’s plan to spend $23 million to cover 24,000 currently uninsured children who are on waiting lists for coverage at County Health Initiatives.

The Assembly budget subcommittee had earlier this month approved a proposal that would give the counties $40 million to cover uninsured children at up to 300 percent of the federal poverty level. The Assembly plan also directed the state to begin administrative efforts to cover all California’s 800,000 uninsured children by 2008.

DeLaTorre said their action would retain the earlier proposal.

Advocates have not yet seen the specific language adopted by the Assembly. It will differ in some details from the proposed initiative pending for the November 2006 ballot.

Since the Senate budget subcommittee adopted the Governor’s proposal to fund the waiting list in the CHIs, this issue goes to conference committee and to the Big Five (the Governor and the four legislative leaders) for resolution.

It is important to remember that in presenting the May Revise, Governor Schwarzenegger took pains to note that he would not support the November 2006 ballot measure on children’s coverage because he does not support tax increases.

When Schwarzenegger first ran for office in 2003, he said he supported every child having insurance. In spite of that campaign rhetoric, Schwarzenegger vetoed the earlier measure, AB772 Chan/Escutia because it lacked funding.

Advocates look forward to his next statement on children’s health insurance: perhaps the next step for Schwarzenegger will the dedication of funding for health insurance for every child below 300% of poverty.


The Assembly budget subcommittee on Monday also:

  • Intervenor funds: Extended a program that allows consumer groups to be paid for their work advocating Department of Managed Health Care regulatory proceedings. The “intervenor funding’’ mirrors what is available to consumer advocates at the Public Utilities Commission and provides health care advocates with up to $350,000 a year until 2012 to continue fighting for consumer protections at the agency level.
  • Managed care rate increase: Approved Medi-Cal rate increase for certain managed care plans. The committee also reversed a five percent rate reduction imposed on all plans in 2004.
  • Provider rate increase: Approved $5 million in rate increases for other providers, such as physicians, labs, pharmacies, ambulances and dentists, who served Medi-Cal beneficiaries.
  • Medi-Cal documentation requirements: Approved tentative language that allows the state to follow federal guidelines in requiring documentation of legal citizenship status – using a passport, or birth certificate and photo ID — as a condition of receiving Medi-Cal.
    • This language was accepted on the condition that the Department of Health Services continued to find solutions that would ensure Medi-Cal recipient services would not be interrupted.
    • Advocates and the state Department of Health Services are in agreement that the new federal guidelines places a significant burden on many CITIZENS of the U.S. who may not have a passport, photo ID or birth certificate.

For questions or more information on any of these issues, please contact Hanh Kim Quach, policy coordinator. 916.497-0923 x 206 or

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