The hearing on health cuts…

Tuesday, February 5, 2008

• More than $1.6 billion in general fund cuts to the neediest families
• Senate Budget Committee reviews provider rate cuts, QSRs, cuts of “optional” benefits
• Absent health reform, senators reflect on sinking status quo
• ALSO: President Bush unveils federal budget; Reminder: VOTE TODAY

More on the Health Access WeBlog: More on the State Budget Cuts and Committee Hearing; Analysis on President Bush’s Budget and Proposed Cuts to Medicare, Medi-Cal and SCHIP; The Presidential Candidates and their Experience with Health Issues; Dusting Off After California’s AB x1 1 Stalls; Post-Mortems Galore for Health Reform;

The Senate Budget Committee met Monday to comb through $1.6 billion in proposed health budget cuts, which would force the state’s poorest residents to overcome bureaucratic burdens to keep their coverage, and leave many residents without access to eyeglasses, hearing aids, teeth cleaning or incontinence creams and ointments. And that’s not including the biggest cuts aimed at the health providers on which all Californians rely.

Some cuts, Chairwoman Denise Ducheny classified as “knee-jerk” policies, and lamented that “some of these savings are so small, we’re spending more time talking about them than what they’re worth,’’ specifically in that instance referring to the $251,000 to be saved (out of a $141 billion budget) by eliminating adult psychology services.


Lawmakers need to make big decisions about these and other programs by March in order to avoid a statewide financial catastrophe, such as defaulting on loans, on July 1. The state is short about $14.5 billion.

California’s perennial budget problem is particularly acute this year because the state has papered over its budget deficits for most of the past decade – borrowing internally from funds it shouldn’t have, deferring payments – several times – that were later ruled illegal, selling bonds to pay off its debt, and reversing the Vehicle License Fee. The latter two make up $9 billion of the $14.5 billion deficit.

Gov. Arnold Schwarzenegger proposed a budget that cuts spending by 10% across the board. See Health Access’ Fact Sheet on the proposed budget cuts at our website, or view the Senate Budget Committee’s analysis of budget impact here:

Medi-Cal, whose recipients earn less than approximately $17,600 annually for a family of three, would weather the bulk of health reductions — $1.1 billion — for the current and 2008-09 fiscal year. The biggest ticket cuts in health services are:

* Rate reductions for providers who care for Medi-Cal recipients; California already ranks 41st out of 50 states in reimbursement rates.
* Elimination of certain benefits for roughly 3 million adults with Medi-Cal coverage, such as eyeglasses, incontinence creams and dental coverage;
* Reinstatement of quarterly status reports for Medi-Cal, forcing children and adults to renew their coverage and justify their income and eligibility every three months.

Healthy Families enrollees would also face higher co-pays and restrictions on their dental benefits.


Budget Committee Chairwoman Denise Ducheny and other lawmakers shook their heads, muttered under their breaths and interrupted the Administration’s staff with questions and assertions, during the afternoon hearing that stretched late into the evening.

Some cuts seemed antithetical — such as eliminating optometry services (but not more expensive opthamology services), and eliminating eyeglass and contact lens benefits for those who obtain the more-expensive eye-prescriptions from opthamologists.

According to some Senators, some cuts just seemed wrong. At one point, a dejected Sen. Joe Simitian after hearing about rashes, lesions and other discomfort resulting from not having incontinence creams, said, “Every now and again, we have to stop ourselves and say, ‘What have we come to?’ We’re talking about people in need. This is just to save $4.7 million. At some point, you just need to stop yourself and to say, ‘What the hell have we come to? Is this really what we aspire to be as a state?’’’

The state that California would become, if the budget cuts are enacted, is the kind that would kick 160,000 children off Medi-Cal because their parents did not, for some reason, submit the proper paperwork every three months.

During one exchange about quarterly status reports, lawmakers hammered staff about the true intent of such a policy.

“Do you have evidence that things like that change on a quarterly basis?’’ Ducheny asked.“We do have evidence that it changes the enrollment,’’ responded administration staff impassively.

“That’s not the question,’’ quipped Ducheny. “The question is, ‘How likely is it that people’s status is actually changing versus ‘Sure, it changes the enrollment because someone didn’t turn in a piece of paper.’’’

Sen. Darrell Steinberg summarized: “We need to be clear about what is happening. [Quarterly status reports] are a pretext for hoping that adults, who may be confused, disabled, or unable to figure it out will not fill out the paperwork and that thei children will suffer.’’

“On it’s face, [filling out the paperwork] is not an unreasonable thing. But when you know that it will lead to children being thrown of the rolls, that’s not the right policy.’’


Monday’s health budget hearing came one week after Senate Health Committee members – of which two budget committee members also participate – failed to pass comprehensive health reform, which would have injected the state with approximately $14 billion in new money, allowed the state to avoid cuts to health programs, and expanded health coverage to nearly three-quarters of the uninsured.

ABx1 1 garnered one “aye’’ vote, while three Democrats voted ‘no’ and three abstained. All Republicans rejected the measure. Lawmakers cited budget and economic concerns as the reason they could not push the proposal forward.

Sen. Alex Padilla, after nearly two hours of testimony, urged his colleagues to view health reform and its connection to the budget. “The critique of the financing of that bill didn’t make a whole lot of sense when put up against the proposed cuts in the budget,’’ he said. “By the same token, the proposed cuts don’t make sense, if indeed, we’re going to pursue and achieve an improvement in the healthcare system. As much as people would like to suggest they’re not linked, in fact, they are.’’


Several dozen recipients and beneficiaries of the state’s programs, as well as advocates and various consumer and professional organizations, stepped forward to oppose the cuts.

Patients spoke of the need for podiatrists to monitor diabetes patients, adults to continue to receive preventive dental cleaning and procedures, and dually eligible Medi-Cal/Medicare recipients to have their $96-a-month Medicare premiums paid for through Medi-Cal.

Lawmakers on the panel were particularly impressed with one witness, who communicated by typing words into a computer, and allowing the computer to “read’’ what he had “said.’’ Such speech therapy equipment would be unavailable under the proposed cuts.

“These ‘optional’ benefits aren’t really ‘optional’ for everybody,’’ Ducheny acknowledged.

The committee on Monday heard testimony about the cuts, but will not make a decision until later this spring.

Health Access will continue to provide updates on budget negotiations throughout the year.

For more information, contact the author of this report, Hanh Kim Quach, policy coordinator for Health Access, at

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

Leave a Comment

%d bloggers like this: