Specifics…

The federal health reform laws (as did in part the economic recovery act) prevented the Governor from proposing the direct health impact of the

As a result of the new federal health reform law, the May Revision does not include a number of the Governor’s January health care proposals that were aimed at reducing eligibility and enrollment in both the Medi-Cal Program and the Healthy Families Program (HFP). The Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act of 2010 require states to maintain eligibility standards for their Medicaid Program and Children’s Health Insurance Program (CHIP) or lose all federal funds for both programs. Specifically, the May Revision withdraws a proposal that would have limited eligibility for the HFP to children in families with incomes up to 200 percent of the poverty line. The May Revision also drops proposals to eliminate the HFP and reduce Medi-Cal eligibility to the minimum required by federal law, both of which would have been triggered if the state did not receive the additional federal funds assumed in the Governor’s January budget proposal.


The new federal requirement to maintain existing eligibility standards mirrors provisions included in the ARRA, which limited states’ ability to impose eligibility policies more restrictive than those in effect as of July 1, 2008. This limitation also restricts states’ ability to increase premiums for enrollees. The May Revision, however, maintains and expands the Governor’s January proposal to increase premiums for some children in the HFP, potentially in violation
of the federal restriction.

Medi-Cal

The May Revision maintains the Governor’s January proposals that would eliminate Medi-Cal coverage for Adult Day
Health Care services, reduce Medi-Cal payments for family planning services, and reduce services provided to certain
immigrants, including legal immigrants who have resided in the US for less than five years. The May Revision also
maintains the Governor’s January proposal to significantly cut spending in the Medi-Cal Program by limiting services
and increasing what Medi-Cal recipients must pay for medical services. Specifically, the Governor proposes to:
• Eliminate coverage for over-the-counter drugs, establish maximum benefit dollar caps on medical supplies and
durable medical equipment, limit visits to physicians or clinics to 10 per year, and limit prescription drugs to six
per month, except for life-saving drugs, for state savings of $90.2 million.
• Impose copayments for medical services for state savings of $118.2 million. Medi-Cal recipients would be
required to pay $5 for physician, clinic, dental, and certain pharmacy services. The Governor proposes to charge a
copayment of $3 for lower-cost drugs.
• Impose a $50 copayment for emergency room visits for state savings of $41.5 million.
• Impose a $100 per day copayment, up to a maximum of $200, for hospital stays, resulting in state savings of
$59.1 million.
In addition, the May Revision:
• Requires seniors and persons with disabilities to enroll in managed care for state savings of $137.3 million.
• Reduces payments to radiologists to 80 percent of Medicare rates for state savings of $10.5 million.
• Freezes payments to hospitals at the current level for state savings of $64.9 million.
• Ceases to pay Medicare Part B premiums for recipients whose incomes exceed the Medi-Cal eligibility threshold
by less than $500 per month for savings of $1.0 million.
Other Health Programs
The May Revision maintains the Governor’s January proposal to eliminate vision services for children in the HFP. The
May Revision also:
• Increases premiums from $24 per child to $42 per child – an increase of 75 percent – for families with incomes
between 200 percent and 250 percent of the federal poverty line effective September 1, 2010. The maximum
premium charged to a family would rise from $72 to $126. This proposal would result in state savings of $13.3
million. This proposal is in addition to the Governor’s January proposal to increase premiums for children in
families with incomes between 150 percent and 200 percent of the poverty line. As noted above, the new federal
4
health reform law requires states to maintain existing eligibility standards for both their Medicaid and CHIP
programs. This limitation, as applied to the Medicaid Program under ARRA, restricts states’ ability to impose or
increase premiums charged to enrollees. The US Centers for Medicare and Medicaid Services is expected to give
guidance on whether the same restriction would also apply to state CHIP-funded programs.
• Increases HFP copayments for emergency room visits from $15 to $50 and adds a copayment of $100 per day
with a $200 maximum for hospital inpatient services for state savings of $3.2 million.
Proposition Fund Shifts
The May Revision modifies the Governor’s January proposal to shift funds from programs funded by Proposition 99 to
Medi-Cal. The proposal now uses funds from two programs rather than five programs as originally proposed for state
savings of $11.3 million. Proposition 99 of 1988 imposed a 25-cent-per-pack tax on cigarettes to support various
health programs. The May Revision drops the Governor’s January proposal to divert $452.3 million in Proposition 63
revenues to fund existing mental health services in 2010-11. This proposal would have required voter approval.
Proposition 63 of 2004 imposed a 1 percent tax on the portion of individuals’ taxable incomes that exceeds $1 million.
VIEW THE FILE Uncategorized

Leave a Comment

%d bloggers like this: