Early signals on the Budget…

Tuesday, April 27, 2010

* CA Assembly Budget Subcommittee Responds to Advocates Testimony & Turnout
* Legislators Express Opposition to Governor’s “Trigger” Cuts
* Mid-Year Status Reporting for Kids Rejected by Subcommittee
* Tougher Eligibility for Low-Income Folks is Rejected as Violation of Health Reform
* Also Rejected: Additional Medi-Cal Benefit Cuts; Elimination of Coverage for Recent Legal

Immigrants; Sunset of Prescription Drug Discount Program; and More.

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HEALTH CUT PROPOSALS FACE OPPOSITION IN ASSEMBLY BUDGET SUBCOMMITTEE: Gov. Arnold Schwarzenegger’s proposed “trigger” budget cuts got shot down Monday by the Assembly Budget Subcommittee No. 1 on Health and Human Services, which deemed them to be either essential services or violations of federal health reform.

The governor planned to make the drastic round of trigger cuts in the 2010-2011 budget year if his demands for $6.9 billion in added federal funding were not met.

But members of the Assembly Budget Subcommittee rejected the administration’s three worst-case-scenario proposals that are included as part of the Department of Health Care Services budget. The Subcommittee, chaired by Assemblyman Dave Jones (D), voted down three sections of the budget cuts:

* A radical reduction in Medi-Cal eligibility for very low-income Californians, so that Medi-Cal services would be yanked from a total of 2.2 million people. Assembly members noted, however, that all experts were in agreement that this proposal violated provisions of the Patient Protection and Affordable Care Act signed into law by President Obama on March 23, 2010.

* An elimination of Medi-Cal benefits that includes essential durable medical equipment such as wheelchairs, feeding tubes, prosthetics and hearing aids. In addition, this portion of the governor’s trigger proposal would deny low income people medical equipment such as diabetic test strips, wound care supplies, tracheotomy care and more. These cuts would affect more than 223,000 Californians, and would come on top of last year’s elimination of dental care, speech therapy, chiropractic, acupuncture, optician/optical lab services, podiatry, psychology and audiology services. After hearing impassioned testimony from dozens of groups, the subcommittee voted against eliminating the new round of benefits the governor put on the chopping block.

* The Assembly members, who included Wes Chesbro, Jim Beall Jr., Hector De La Torre, Brian Nestande and Bill Emmerson in addition to Chairman Dave Jones, also voted to restore $10 million in funding to community clinics through the Early Access to Primary Care Program. Following the close of budget negotiations, Schwarzenegger unexpectedly stripped that funding from the 2008-2010 budget bill. Among those testifiying as to the illogic of this cutback was Beth Capell of Health Access, who pointed out that California should be ramping up, not shutting down, capacity in anticipation of the year 2014, when health care reform expands access to care.

The subcommittee heard moving testimony from many Californians who had benefited from the access to medical supplies and services through the Medi-Cal program. One woman, Inez Black of Hayward, told the committee she had largely recovered from brain damage thanks to the help of occupational, cognitive and physical therapy provided through Medi-Cal benefits that the governor now wants to cut. “I’m living proof that the therapy works,” Black told lawmakers. Your money is so well spent and I am so grateful.”

STANDING ROOM ONLY: Among those testifying against the cuts were disability rights activists, the California Primary Care Association, the California Immigrant Policy Center, the California Retailers, Rite Aid, Abbott Laboratories, Congress of California Seniors, the California Medical Association, the California Pan-Ethnic Health Network, Children Now, the 100% Campaign, the American Cancer Society, advocates for foster care youth, Planned Parenthood, AARP, the Unitarian Universalist Legislative Ministry and many more.

Even the administration’s representative, Toby Douglas of the Department of Health Care Services, acknowledged the severity of the governor’s “trigger” proposals, saying, “These are terrible proposals…they will have terrible impact on our beneficiaries.” And another administration official was not surprised when mid-year eligibility requirements for children on Medi-Cal was rejected by the subcommittee. The cynical proposal, designed to drop 475,000 low-income children from services because their parents likely would not be able to keep up with the paperwork, likely would have violated “maintenance of effort” requirements in both the economic recovery act and the new federal health reform law.

Still, the governor and legislature do face another massive budget deficit, and some measures to help patch the hole were adopted. The Subcommittee on Monday passed a proposal to extend a Medi-Cal Managed Care Plan fee used to help draw down matching federal funds to support Healthy Families. Without making a final decision, the panel left open for discussion a 10 percent reduction in payments to public and private hospitals in 2010-2011. They also agreed to extend for one more year a delay in California’s discount drug program – while at the same time eliminating a section of the Governor’s proposal that would have set a date for a sunset of the program before it ever started.

The subcommittee also rejected the governor’s proposal to eliminate Medi-Cal for legal immigrants who were in California less than five years. Assemblyman Nestande reminded those attending the hearing that “We understand the needs out there but of course we all realize it’s a tough economic environment” for state budgetary purposes.

The subcommittee also [CORRECTION: left open for discussion the Governor’s proposal to] ax Medi-Cal Family Planning Services that receive a 9 to 1 federal match, meaning $9 comes back to the state from Washington for every $1 California spends on the program. A UC San Francisco study concluded in 2002 that the Family PACT program had prevented 205,000 unwanted pregnancies.

NEXT STEPS FOR THE BUDGET: However, there’s no guarantee that the full Assembly Budget Committee will follow the recommendations of the subcommittee. No decision on the budget is final until the budget is passed by the Legislature and signed by the Governor.

The governor himself may alter some of his budget and trigger proposals in the May revision that is scheduled to be unveiled on Friday, May 14. Separate hearings will be going on in the state Senate before the two houses join their budget proposals in a conference committee.

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