A bad budget year, indeed…

Tuesday, April 29th, 2008

* Assembly and Senate Budget Subcommittees review cuts to health programs
* Proposals include eliminating various Medi-Cal benefits, like dental
* Also: Cuts to safety-net hospitals, community clinics, and children’s enrollment
* Votes will take place after Governor’s May revision
* May budget numbers look grim, Schwarzenegger warns

Click Here for What’s New on the Health Access WeBlog: New Field Poll Shows Strong Support for Stalled Health Reform Measure, and Continued Momentum for Reform; A New Window of Opportunity in 2009-10?; The False Choice Between State and Federal Action; Musical Chairs Among the Governor’s Health Team; Bush’s Medicaid Changes: How They Would Impact California, and How the California Delegation Voted; The World Health Care Congress and the Presidential Plans; Budget Blues Becoming Bigger; The Student Insurance Scam; New Report on QSRs; and more…

Yesterday, both the Senate and Assembly budget subcommittees that oversee the public programs for health coverage reviewed cuts proposed by the Governor. The committees held off on big ticket items pending the May Revision of the budget – which will be released in a couple of weeks.


Sen. Elaine Alquist presaged the Senate budget subcommittee hearing by saying that “all cuts were on the table,’’ even if members of the committee did not like them.

ACTIONS: The Senate subcommittee took actions on three small items, one to increase staffing for HIPPA compliance, and another to cut staffing for the Primary Care and Rural Health Branch.

WORKING DISABLED: Another vote eliminated the sunset on the CA Working Disabled Program, which provides Medi-Cal coverage to people with disabilities who work, as long as their income is below 250% of poverty ($26,000 for an individual). (A related bill is Assemblywoman Julia Brownley’s AB 851.) That action makes this program permanent.

PRESCRIPTION DRUG DISCOUNTS: Another item that had been slated for approval – further delaying the implementation of the CA Discount Prescription Drug Program – was taken off the agenda for day, but may be considered in the future. This program is the result of 2006’s AB 2911, which would allow the state to use its leveraging power to negotiate lower prescription drug prices for millions of California’s uninsured, who currently pay full price for drugs. The program has already been delayed once. The Governor’s budget does include its implementation this year.

CHILD ENROLLMENT SELF-CERTIFICATION:The Administration is pushing for the implementation of SB 437 (Escutia) which would allow Santa Clara and Orange Counties to start up a “self-certification’’ pilot program, which would streamline enrollment processes for children enrolling in Healthy Families or Medi-Cal by allowing families could self-certify their income and assets for enrollment in these programs. Like AB 2911, the implementation of this legislation has also been delayed once before. The Administration is asking for $30.9 million to start up this program ($14.4 million from the general fund). The Legislative Analyst’s Office has recommended the delay, but health and child advocates, including the 100% Campaign and Health Access California, testified against the cut. Action was “help open.”

GOVERNOR’S CUTS STILL PENDING: The following cuts were proposed by the Governor and heard by the Senate Health Committee, but action was “held open,” with decisions likely to be made after the Governor’s announces the May Revise.

• CLINICS: In the Governor’s budget proposal, 400 clinics in the state, providing care to both urban and rural populations, as well as special programs for migrant workers and Native Americans would be reduced by $3.5 million. All told, the funding cut would mean about 120,000 fewer visits to clinics for primary medical care, dental care, tobacco cessation and other health education information.

• CHILD HEALTH & DISABILITY PREVENTION PROGRAM (CHDP): The governor proposes to cut local administrative funding for this program by $1.1 million, though the Department of Health Care Services said it will be up to counties to decide whether this particular program would be cut, or whether they could absorb the cuts elsewhere. Either way, cutting administrative costs for CHDP would make it harder for children – from birth to 21 – to get access to health care through this program.

• CALIFORNIA CHILDREN’S SERVICES: This program would be hit three times, losing a total of $115 million ($51.4 million general fund), in provider reimbursements, case management and administrative costs. Many provider and patient groups testified that CCS saves the state money because it provides case management, care, treatment and therapy for children with medical conditions such as birth defects, chronic illnesses or genetic diseases, such as hemophilia and cystic fibrosis. These children would undoubtedly become more severely ill without these services and wind up needing far more expensive care.


As in the Senate, the Assembly budget subcommittee did not take votes on any items but did discuss the following proposals:

MEDI-CAL BENEFITS: The Administration has proposed a $19 million cut to services that are not federally mandated by Medicaid–so called “optional” benefits. That includes access to optometrists, podiatrists, therapists, opticians and prescribed creams and washes. In total, these cuts would affect nearly 1 million Medi-Cal recipients who need eyeglasses, mental health therapy, speech therapy after a stroke, creams to avoid bedsores and regular checkups for their chronic diseases.

DENTAL BENEFITS: The biggest chunk of savings from cutting optional benefits comes from the elimination of the adult dental benefit – which would reduce state spending by $115 million, but also cause the state to lose an equivalent amount in federal matching funds. The California Dental Association presented an alternative to a full elimination of the program, which would eliminate specific procedures while retaining the program. The program is already threadbare, with 4,000 dentists serving 6.5 million patients. If it adult dental benefits were eliminated, it could take up to 10 years to rebuild provider networks and infrastructure once money was made available again, the association said.

PUBLIC HOSPITAL FUNDING: The Administration proposes to shift more money from public hospitals, to pay for other health services. All told, the state would siphon $78.8 million from public hospitals in 2008-09. The state would need federal approval to do this, to amend a “hospital financing waiver” agreed to three years ago. Assemblyman Jim Beall suggested the state wait until after the presidential election to see if “we could do better if we had a more cooperative administration’’ to get more federal fund in the first place.

PRIVATE “SAFETY-NET” HOSPITALS: Under this proposal to the “Disproportionate Share Hospitals (DSH)” payments, funding would be reduced by 10%, resulting in a $24 million state savings, but a loss in equivalent federal funds. These funds are used to help private hospitals that see a large number of uninsured and Medi-Cal recipients.

A number of advocates testified against the cuts, including: California Association of Public Hospitals, individual public hospital systems, Western Center on Law and Poverty, Health Access California, Californians for Disability Rights, children’s hospitals and others.


The May Revision is expected to be released in the next two weeks. Gov. Arnold Schwarzenegger has projected an even bigger gap than the current $16 billion shortfall.

Health Access will keep advocates up to date on budget issues through these E-mail updates and on our blog. For more information, contact Health Access Policy Coordinator Hanh Kim Quach at hquach@health-access.org.

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