First round on health cuts from the Budget Conference Committee…

Wednesday, June 10th, 2009

* Committee to Decide Later on Major Cuts to Medi-Cal, Healthy Families, AIDS Programs
* Cuts Made to Alzheimer’s Services, Asthma, Application Assisters, AIM, MRMIP, Etc.
* Some Cuts Considered Way Too Severe: “A Bright Red Moral Line”
* Governor Continues to Reject Revenues Needed to Prevent Devastating Cuts

* More Updates on the NEWLY REDESIGNED Health Access Blog: California’s Cartoon Future; Previous Posts From Budget Conference Committee; The Real Start of National Health Reform; Unprotected While Still Paying Premiums; The New Kaiser Health News; A Lack of Competition in California’s Insurance Market; Passage of Key Bills in the Legislature; Maternity Coverage Debated; Who Is Impacted By the Budget Bloodbath?; Report from Appropriations Committee; New Budget Blogs

* Follow Health Access California on Twitter, at @healthaccess, or for quick updates on budget and health reform issues.

Over the last two days, the Budget Conference Committee of the California Legislature have been reviewing the full range of cuts to health and human services. They have made severe cuts, and rejected even worse proposals.

Stymied by a lack of big-picture information, the Committee chaired by Assemblywoman Noreen Evans did not take final action on a number of sweeping health care program cuts proposed by Gov. Arnold Schwarzenegger to help balance California’s teetering budget. They “held open” these cuts, but with the expectation that many specific decisions would be made by Monday.

A one-page list of all the health care cuts proposed by Governor Schwarzenegger is at the Health Access website, at:

The committee took a pass on voting on several of the harshest cuts until a more comprehensive look at the impacts could be pulled together. It is still possible, even likely, that many of the programs “held open” may get cut, especially if the legislature does not raise the revenues needed to offset these cuts.

Among the items held open were:

* A controversial proposed waiver the governor is seeking from the federal government, which the Department of Finance said would save the general fund $1 billion. The governor says the waiver will allow him flexibility to operate outside of some of the federal government’s Medicaid rules, and the conditions of accepting billions from the economic stimulus package, the American Reinvestment and Recovery Act. The LAO said the savings were “speculative” at best. The proposal was held over when Committee Vice Chair Denise Ducheny (D) sought more specific information, noting that California already has lowest per-patient Medicaid spending in the nation.

* Elimination of the Healthy Families program that serves nearly 1 million children. Abolishing the program would save the general fund $368 million but would also cost the state $644 million in matching federal funds. It would also make California the only state in the nation to totally opt out of the federal Children’s Health Insurance Program, which provides $2 to match every $1 spent by the state. Said Committee Chair Noreen Evans, “I think we have a moral obligation to take care of our children. To eliminate a program like this is just indefensible. I will not support the elimination of this program – but I will think about cuts.”

* Elimination of all general fund support, or $34.2 million, for community health clinics — including rural, seasonal migratory worker clinics and American Indian health clinics, as well as the Expanded Access to Primary Care Clinics. Together, the clinics provide about 2.3 million visits annually for low-income and uninsured people;

* Elimination of maternal and child health (MCH) funding for the black infant health program designed to help “at risk” pregnant women and parents; the Adolescent Family Life program, which helps 17,000 pregnant teens up to 18; a birth defects monitoring program; a local county grant program aimed at improving the health of young women and families;

* A proposal to restrict Medi-Cal services to new legal immigrants and people allowed to relocate to the U.S. by the federal government – such as survivors of the Vietnam War who aided U.S. troops. The latter group “tends to be refugees as a whole, mostly political refugees” said Ducheny. She favored finding out if the federal government is willing to devote more funds to help pay for health care services for this population.

* Reduced funding for AIDS programs that Senator Mark Leno (D) said has reduced the threat of AIDS in California from the level of an epidemic.

* A proposal to eliminate Adult Day Health Care opened a discussion as to whether various programs aimed at helping the elderly, including Alzheimer’s victims, shouldn’t be re-examined, restructured and streamlined to make them more efficient. The proposal, which the Department of Finance said would save $170.5 million, was held over as well.

The committee’s frustration was evident, with Vice Chair Denise Ducheny (D) demanding a more comprehensive analysis of the piecemeal, disjointed cuts proposed to health care programs. Evans scolded Department of Finance, saying the committee needs to be able to make informed decisions. “We simply don’t have the information we need by virtue of how this budget is worked out,” Evans said.

Also rankling Evans were the governor’s requests for money to hire anti-fraud staff in various positions – at the same time as current state employees are asked to shoulder cutbacks in compensation. “I think adding new positions when we are furloughing employees is not a good way to go,” Evans said. “This is a problem. Why, with furloughs, would we ask for more money? I’m not really in favor of approving more positions.”

But Assemblyman Roger Niello (R) pushed his colleagues to make hard choices swiftly, noting the budget deficit of $24 billion represents a 25 percent reduction in revenue flowing into the state’s coffers. “Excuse me for sounding like a Republican, but government is not the only answer to our problems,” Niello said, adding that the private sector as a whole has not taken as hard a hit as state government has.

CUTS MADE: A variety of cuts were made–often with relatively small savings but big impaccts. Niello pressed for elimination of $20 million in state funding for the Domestic Violence Shelter Program, which would reduce services to over 105,000 battered women. He said that community supporters, nonprofit foundations and philanthropists should step up their donations to the shelters. “This is a perfect example of the many difficult decisions we’re going to have to make,” Niello said. From a personal perspective, I support the shelters – I have donated money to them and will continue to do so as a member of the community.”

Though the governor’s proposal would have eliminated all general fund support for the shelters, Republican Assembly members on the committee said they could back a 50 percent cut. Ducheny asked for a less onerous generous 10 percent cut, then compromised and proposed the 20 percent cut the committee eventually adopted.

Assemblymember Kevin de Leon (D) said he was struggling with approving any cuts to the shelters, noting that he has family members who have been victims of domestic violence and sought refuge in the shelters. Of the governor’s original, harsher proposal, de Leon said, “This is a real tough one. This is not a haircut, it is a decapitation. If the economy continues to sour, demands for these services will be needed more than ever,” as stress and financial strain impact more family lives, he said.

* The budget committee met the governor halfway on another proposed cut. The Governor proposed eliminating general fund support for Alzheimer’s Research Centers, of which there are 10 throughout the state. The committee agreed to a 50 percent funding cut, with the stipulation that the $3 million saved would go toward providing services instead of research.

Other cuts that were decided on included:

* The one-time elimination of support for the immunization assistance program, for $18 million in savings, in light of economic stimulus funds going to the same purpose.
* The suspension of a children’s dental disease prevention program that served 300,000 children, for a savings of $2.9 million.
* The elimination of certified application assisters that help low-income families apply, stay enrolled, and use Medi-Cal and Healthy Families coverage, for a savings of $2.7 million, with the probability of reducing enrollment as a result.
* A $6.6 million reduction in the Major Risk Medical Insurance Program (MRMIP), which provides some coverage to those “uninsurable” patients denied for “pre-existing conditions”–and already has a waiting list.
* A $4.9 million reduction in funding for Access for Infants and Mothers (AIM), which provides health care to over 13,000 pregnant women.
* A reduction in funding for the state Asthma program

A FEW CUTS OUTRIGHT REJECTED: One proposed cut that was outright rejected as too severe was the elimination of “state only” programs for dialysis, breast and cervical cancer treatment, post-partum care and non-digestive nutrition for low-income patients.

After a dramatic discussion, the committee voted against killing the programs, packaged together to shave $20 million off California’s gigantic $24 billion deficit. “If we go with the governor’s proposals No. 2, 3, 4 and 5, people will die,” Assemblyman Kevin de Leon (D) told his colleagues.

Assemblyman Robert Blumenthal (D) was blunt: “This is a bright red moral line we cannot cross. It’s something I am very worried about.”

Still, the prospect of drawing a line when the task of balancing the budget seems so Sisyphean struck Senator Bob Dutton (R) as impractical. The budget must be balanced by June’s close. “I don’t think it’s right saying people are going to die,” Dutton said. “I mean, I could die in a car crash today when I leave here. I still support the governor’s proposal.”

The Committee also rejected family planning funds, which had the benefit of providing a 9:1 match from the federal government.

ONGOING EFFORTS: While a budget for 2009-10 was approved in February, these budget cuts are part of a Governor’s proposal to solve a $24 billion deficit that has emerged since then, as part of the economic recession. The Governor has yet to budge from his all-cuts approach to the budget, and has rejected raising taxes and revenues as a way to prevent the worst of these cuts.

In addition to the $2.4 billion in health care cuts, there are other severe cuts to other human services as well, to IHSS home care, SSI/SSP for seniors, CalWORKS, CAPI and CFAP.

The Budget Conference Committee will soon revisit the cuts “held open” in the next few days. Committee Chair Evans indicated the goal of having the Committee finish their work by Monday.

This report was written by Cynthia Craft of Health Access California. More commentary will be available on the newly-redesigned Health Access website at, and our blog, at

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

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