The Budget starts to get scrutiny…

Friday, March 25, 2010


* Federal Health Reform “Reconciliation” Package Passes Both Senate and House
* 2010-2011 State Budget Gets Its First Glances of Scrutiny
* Senate Budget Subcommittee Rejects Harsh Cuts That Go Against Fed Health Reform
* Assembly Budget Subcommittee Grills Adminstration on Impact of Budget Cuts

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Yesterday, both the U.S. Senate and House of Representatives took final votes on the on a “reconciliation” package of important improvements to historic health reform legislation signed by the President earlier this week.

THE REFORM IMPROVEMENTS: The new changes would provide more assistance to California’s families and small businesses struggling with the cost of coverage, and to the state of California and its budget as well. The changes would:

* increase the financial assistance for low- and moderate-income families to afford insurance premiums, and to protect them against excessive out-of-pocket costs–especially important in a state with a high cost-of-living like California.

* improve drug coverage for seniors by eliminating the Medicare prescription drug coverage “donut hole” that currently leaves some seniors on the hook for thousands of dollars of drug costs.

* improves the financial assistance to states like California and our health system in multiple ways:
* eliminates the special Nebraska provision and instead increases the federal assistance for any expansion of Medicaid, by covering 100% of the cost in the first three years, and at worst in the tenth year, continuing to provide a significant 9:1 federal match. (California’s normal matching rate is 1:1.)
* provides resources for a significant increase in Medicaid reimbursement rates for primary care physicians for two years, especially helpful for California that has some of the lowest rates in the nation;
* delays and narrows the excise tax on high-cost health insurance plans, which were more prevalent in California due simply to our high cost-of-living;
* improves the formulas for payments to safety-net (DSH) hospitals.

Although health care for low-income Californians has traditionally been a state and county responsibility, the federal governmet, under health reform with this package of improvements, will provide California with over $70 billion between 2013 and 2019 to subsidize public and private coverage for low- and moderate- income individuals and families. In particularly, the federal government would cover approximately 97% of the costs of expanding Medi-Cal to new populations over that period.

ALERT: As our nation goes forward on coverage expansion, California should not go backward with additional health care cuts that take us and our health system in the wrong direction. California should take advantage of this opportunity to draw down billions in federal funds for our health system and our economy. While health reform helps prevent some eligibility cuts, other programs are left vulnerable to budget cutting.

* CALL YOUR LEGISLATOR to urge them to reject health care cuts, especially to Medi-Cal benefits and other key services. Click here (hyperlink to to enter your zip code and find your legislators’ phone numbers.

* If you have Medi-Cal and use threatened optional benefits (see below) and are willing to tell us your story to help stop the cuts, please ALSO contact Jessica Rothhaar at or 510-873-8787 ext. 107 to tell us what it would mean to lose coverage for the products and services you need. Your story can make a difference!

* To join our fight against health care budget cuts, also email with your city & zip code. We will let you know about upcoming meetings, town halls, rallies and opportunities to meet with your local legislator. Together, we are stronger than we are apart!

BACK IN SACRAMENTO, ACTION STARTS ON 2010-2011 STATE BUDGET — Already, federal health reform is guiding California’s lawmakers’ thinking as they begin the process of considering the next round of state budget cuts to health and human services. Against the backdrop of Congressional action on the historic Patient Protection and Affordable Care Act, legislative subcommittees in both the Assembly and Senate launched their examination of the governor’s proposed 2010-2011 state budget.

SENATE HEARING: On Thursday, a state Senate Budget Subcommittee rejected the harshest of Gov. Arnold Schwarzenegger’s proposals to scale back publicly funded medical services, partially because they did not meet the standards set by the new federal health reform law, finalized by the U.S. House on Thursday.

As we begin a national effort to increase coverage, the new federal law prevents states from undercutting it’s effort by reducing eligibility to existing public programs–what’s called “a maintenance of effort.”

Schwarzenegger’s proposed budget threatens to reduce access to health care for nearly 2.7 million people in need, including 875,000 children. This would raise the number of uninsured Californians to more than 10 million.
“The whole thing is nonsensical,” said Sen. Mark Leno (D), chair of the subcommittee. “The concept is to improve access to health care, not to dismantle what the federal government has just achieved.” Under Leno’s leadership, the panel rejected the most devastating cuts, the so-called trigger cuts that Schwarzenegger would “pull the trigger on” if his demands for $6.9 billion in added federal funds is not met. Rejected were:

· The wholesale elimination of the Healthy Families federal-state program that provides low-cost medical coverage to children of low-income families who pay modest premiums. About 1 million children rely on Healthy Families for their health care.

· A stiffening of eligibility requirements for Medi-Cal so that millions of Californians, including working families, children, and the aged, blind and disabled would no longer qualify for public medical care.

· Eliminating nine categories of Medi-Cal benefits – on top of 10 other medical services that Schwarzenegger eliminated last year. The nine are: hearing aids, physical therapy, occupational therapy, orthotics, access to independent rehab facilities, outpatient heroin detoxification, medical supplies, prosthetics, and durable medical equipment such as wheelchairs and oxygen tanks.

· Imposing mandatory co-pays upon Medi-Cal recipients, a move that providers said would create a barrier to access to medical care and could threaten patient flow at vulnerable community clinics. The California Primary Care Association opposed this proposal, reporting that six of its clinics have closed and others statewide suffered a loss of $70 million due to last year’s budget cuts.

· Imposing twice-yearly paperwork requirements on families with young children who receive state-funded health care. The move is designed to reduce the number of children receiving care. A representative from the Department of Health Care Services said an estimated 471,000 children would be dropped from the program because their families expected to fall behind on the twice-yearly paperwork. The subcommittee ordered this proposal rejected and replaced with only annual enrollment paperwork requirements, in keeping with the mandates of the new federal health care law.

Other aspects of the 2010-2011 health and human services budget were put off until the administration provides more detail in the governor’s May revision of his budget package. Ad important as theses votes are, No vote is final unless the entire budget if final and signed.

ASSEMBLY HEARING: Meanwhile, Californians hard-hit by the deep recession are coping with severe cuts from Schwarzenegger’s budget cuts last year. Ten core Medi-Cal services were eliminated last year: dental care, podiatry, chiropractic services, infection-preventing skincare products for the incontinent, optometry, audiology services, optician services, acupuncture, speech therapy and psychological services. In addition, the Healthy Families program was suspended for two months while funding was secured to patch the hole left by the governor’s cuts to the children’s health insurance program.
One consequence to the 2009-2010 budget cuts has been an increase in use of emergency room services, including for emergency dental care.

Another, which Assemblymember Noreen Evans (D) has vowed to reverse, is a six-month freeze of new enrollment in the Every Woman Counts breast cancer early detection and treatment program for low-income women. In addition, the governor unilaterally closed the program to women aged 40 to 50, allowing only women 50 and older to be screened. Evans, a member of the Assembly Budget Subcommittee, which met Wednesday, said the governor took the action against the Legislature’s wishes and she would work to ensure full access to the program is restored.

Other action by the Assembly Budget Subcommittee included fact-finding and questioning administration officials on how many Californians would be affected by proposed health and human services budget cuts. In a majority of cases, administration officials were unable to answer the Assemblymembers’ queries.

Assemblyman Wes Chesbro (D) chastised the administration’s representatives for proposing radical cuts without the data to measure the impact on Californians.

“Our California budget is about real lives and real families and cascading effects of many of the cuts that have occurred,” Chesbro said, stressing that one family in need may suffer multiple cutbacks in multiple health care programs.

Coming up will be an Assembly Budget Subcommittee on the governor’s 2010-2011 budget proposal at which the public will be able to testify.

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

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