Bad, bad budget cuts…

Today, Governor Arnold Schwarzenegger proposed a new California budget that eliminated or eviscerated health and human services.

In a tough budget situation, Governor Schwarzenegger’s revised budget represents the worst possible choice for California families, for our health system, and for our economy. At a time when millions are looking for relief, the Governor has proposed cuts that will deny medically necessary care, place greater financial strain on families, and turn back hundreds of millions of dollars in federal matching funds for our economy.

THE SPECIFIC HEALTH IMPACT: California children and families, seniors and people with disabilities will find their prescriptions and doctors visits limited, their coverage for certain treatments capped, and significant costs for getting doctor and hospital care. Some of these cuts will not just delay and deny care, but will have life and death impacts.

BETTER CHOICES FOR CALIFORNIA: There are better choices for California—ones that balance cuts with revenues, preserves the health system we all rely on, and fosters our economic recovery. In contrast, Governor Schwarzenegger’s budget undermines our ability to create jobs and our health infrastructure–the foundation on which we need to take advantage of the new opportunities under health reform.

NO NEW TAXES?: Governor Schwarzenegger says there are no new taxes in his proposal, and that’s true for corporations. For eight million in low-income California families, there are significant increased costs to have and access basic medical care. This doesn’t just hurt those families, but our shared health system and our economy.


Federal law, through the economic stimulus dollars and the new health reform law, prevented Governor Schwarzenegger from cutting Californians off of coverage under Medi-Cal and Healthy Families.

Despite this, the proposal has severe cuts that will make it harder for eight million Californians from getting the care they need. The proposals include $523 million in general fund dollars to Medi-Cal, and another $16.5 million cut in Healthy Families. Other key human services, including CalWORKs, IHSS, mental health, child care, and other programs are either eliminated or eviscerated. The health cuts include:

* A cut to Medi-Cal of $523 million, limiting or placing financial barriers to care for over 7 million Californians, mostly low-income families, seniors, and people with disabilities. The impacts include:
* Limiting doctor or clinic visits to 10 a year, for a population that includes seniors and people with disabilities.
* Elimination of coverage for over-the-counter drugs, and caps on benefits for hearing aids, durable medical equipment like wheelchairs, wound care supplies, urological supplies, etc.
* Copays of $5 for doctor visits, $50 copay for ER visits and $100 per day for hospital stays. (Remember that individual Medi-Cal patients have incomes of less than $10,800/year for an individual, $18,310/year for a family of three).
* Shifting seniors and persons with disabilities into mandatory Medi-Cal managed care.
* Freezing hospital rates

* Increase in premiums and cost sharing in Healthy Families, for a savings of $16.5 million.

* The budget continues to include elimination of coverage for 90,000 legal immigrants, and for Adult Day Health Centers now used by 35,000 frail adults.

ON THE ECONOMIC IMPACT: Health Access California released a report earlier in the year entitled, “Cuts to Health Care are Bad for the Economy,” which shows that such sweeping health care cuts in California would cost the state more than 42,000 jobs, at the very minimum. The report is based on research by the University of California at Berkeley, which calculated that cuts (or investments) to health care services has the biggest “jobs-per-billion” impact than other budget solution, significantly more than tax increases on the high-income earners or an oil severance tax. That research is on the web at:

There is no place in the budget where you get more bang for your buck than investing in health and human services, both because of federal matching funds, and because benefits to low- and moderate-income families get recycled into the economy quickly. You can’t outsource health care. Nothing has a worse economic impact than cutting health and human services, which leads to lost federal funds and ripple effects in our health system and economy.

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