The result of a cuts-only budget…

Friday, May 22, 2009

Nearly 2 Million Californians Could Lose Coverage
Under Governor’s Proposed Health Budget Cuts

* Governor Proposes Elimination of Healthy Families Program for Over 1 Million Children
* Governor Also Seeks Federal Permission for $750 Million Cut to Medi-Cal Eligibility
* Such Medi-Cal Eligibility Cuts Could Impact 975,000 Children, Parents, Aged, Disabled
* Under Medi-Cal/SCHIP Cuts, California Would Lose Hundreds of Millions in Federal Funds
* Many Other Health Cuts in Consideration

A new report by Health Access Foundation details how more than 2 million Californians could lose or be denied health care coverage under Governor Arnold Schwarzenegger’s latest budget proposal.

In analyzing policy changes in the governor’s May Revise, Health Access estimates that this latest version of the 2009-2010 budget will lead to a lack of coverage to approximately 1.5 million children, 433,600 low-income parents and 73,364 seniors and disabled people. The full report is available on the front page of the Health Access website (, and specifically at:

Because the Governor is focused on a cuts-only budget solution, 2 million Californians could lose coverage, and face severe health and financial impacts as a result. Advocates argue that cuts of this magnitude, and this substantial an increase in the uninsured, will have a dramatic impact on the health system we all rely on. If enacted, this would be the most profound rollback of health coverage in the history of the nation. The economic impacts would be significant as California will lose hundreds of millions of dollars in federal matching funds, for our health system, and our economy.

The Health Access report focused on two main proposals:

* The just-announced proposal to eliminate the Healthy Families program, which currently provides health coverage to 910,000 children and is projected to cover over 1 million children in the budget year. Though it would cut $387 million from general fund spending, it would lead to an outsized loss of at least $712 million in federal funds. California would be the only state in the nation not to cover these low-income children.

* A proposed $750 million cut in Medi-Cal eligibility and other reductions, which would mean a loss of $1.2 billion in federal matching funds, and a combined nearly $2 billion cut to our health system and economy. The Governor has proposed revisiting past efforts at cutting Medi-Cal that would deny coverage to 978,500 children, parents, seniors, and people with disabilities. Such cuts would endanger over $8 billion in money from the economic stimulus package, so Governor Schwarzenegger is seeking permission from the federal government to make these cuts. The previous proposals include:

* Denying low-income parents: Today, a family of three earning a Federal Poverty Level income of $18,310 could qualify for Medi-Cal. Under the governor’s proposal, eligibility would be limited to 72% of the federal poverty level – or a family of three that earns no more than $11,169. That change would lead to the loss of coverage for an estimated 433,600 working parents.

* Imposing paperwork burden so families fall off coverage: The governor proposes quadrupling bureaucratic paperwork a family must file each year to win eligibility for children’s’ coverage under Medi-Cal, figuring that the more forms there are to fill out, the less likely a family is to keep up with the burdensome paperwork. To get access to Medi-Cal, parents would have to submit forms every three months. This change would knock an estimated 471,500 children off public health insurance.

* Imposing significant costs on seniors and people with disabilities such as those enrolled in the Aged, Blind, and Disabled program, which would lead people to have to pay more for health coverage. This change would cause 73,364 people to lose no-cost coverage.

Other health care cuts being proposed are listed in the report and on a one-page Health Access fact sheet, also on our website here:

The Governor argues that additional cuts are the message from Tuesday’s defeat of his package of ballot propositions. But the voters disputed this by giving the least support to his propositions to make cuts to mental health, children’s care and other vital services. Health, consumer, and community organizations argue that given the size of the deficit, we need all options–including taxes and revenues–on the table to prevent the worst of these cuts.

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

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