Dramatic Day of Debate and Decision on Medi-Cal Expansion and the State Budget

Saturday, June 15, 2013


* PASSED: Major expansion of Medi-Cal, AB1x1(Speaker Perez/Pan) and SB1x1(Hernandez/Steinberg) to over one million Californians, and making it easier to get on and stay on Medi-Cal coverage for many more, under the Affordable Care Act.

* PASSED: Key health budget trailer bills, (SB77/AB82), to improve Medi-Cal coverage, including restoration of most dental services for 3 million California adults in May 2014; Also includes restoration of enteral nutrition benefits, improvement of mental health and substance abuse services, and extension of coverage for former foster youth until ACA options kick in.

* PASSED: Budget trailer bill (SB78/AB83) to extend managed care organization (MCO) tax to support $500 million for health programs, and another (SB80/AB85) to cut $300 million from county health services in first six months, and hundreds of millions more in future years, reducing capacity of the county safety-net to provide care to the remaining uninsured.

Today, the California Legislature passed historic legislation to expand Medi-Cal to over one million Californians, as well as key budget trailer bills that restore many dental services to over three million Californians and other key improvements in Medi-Cal.

The bills the Legislature passed included the major Medi-Cal expansion bills (AB1x1/SB1x1), and budget bills such as the main health trailer bill that includes the restorations to dental and other benefits (SB77/AB82), the reallocation of county safety-net dollars (SB80/AB85), and another to reinstitute the Managed Care Organization (MCO) tax to help fund health in the budget (SB78/AB83).

MEDI-CAL EXPANSION: The major health reform special session bills to expand Medi-Cal, AB1x1(Speaker Perez) and SB1x1(Hernandez/Steinberg), were passed with wide margins and even a few bipartisan votes. The one Republican who spoke against the measure, Assemblymember Tim Donnelly even mentioned he was “disappointed that there aren’t more microphones up” from his GOP colleagues as he railed against Obamacare and urged California to follow a doctor’s oath to first do no harm. Assemblymember Richard Pan, chair of the Assembly Health Committee and a practicing doctor, responded by saying he took his oath seriously and that meant ensuring his patients were covered. “This is truly a momentous day,” he said, the first of several notes to the historic nature of the legislation.

Assembly Speaker John A. Perez, author of the legislation to expand Medi-Cal AB1x1, noted that these bills are “how we get affordable health care for millions of Californians.” The bills passed the Assembly 55-24, with unanimous Democratic support and the vote of GOP Assemblymember Katcho Achadjian.

In the Senate, Senator Ed Hernandez, author of the companion legislation to set the Medi-Cal benefits level SB1x1, stated that “the Affordable Care Act is the most fundamental transformation of our health system in 40 years,” and cited California’s leadership in implementing the measure. He cited that the Medi-Cal expansion wouldn’t just expand coverage, but would help break the cycle of poverty in our communities, ease the burden on our safety-net, and bring in billions of dollars of federal money into our health system.

GOP Senators Anderson and Gaines cited worries that the federal government would reduce their financial support for the newly eligible in Medicaid lower than the 90% that the Affordable Care Act guarantees. Senator Hernandez pointed to a “tie-back” provisions, insisted on by Governor Brown, that if that federal participation was lowered below 70%, the Legislature would have a year to respond before the Governor would have the ability to turn off the expansion. Senate President Pro Tem Steinberg made the point that the biggest threat to continued federal funding was the GOP-controlled House of Representatives, and he would be happy to accompany his GOP colleagues to lobby them to stop them from repealing Obamacare. Steinberg also stated that without the Medicaid expansion, taxpayers and ratepayers are on the hook “big time” for the costs of uncompensated care.

Senator Leno said the bill and the Medi-Cal expansion made the point that “health care is not a privilege for the fortunate few,” and that our state should be proud that over one million Californians already have new coverage because of the ACA and California’s efforts to implement it. On AB1x1, “this is a big deal,” a chance for reform to help the USA change the fact that the nation is ranked 37th in health by the World Health Organization.

Senator Hernandez closed saying, “we have to make sure California continues to lead on health care” and implementing the ACA, “the most important piece of healthcare legislation this country has ever seen.” He ended with a personal touch, “When I ran for public office, it was for this reason… The reason I ran was for the people who came into my office” as a doctor, for those who didn’t have coverage.

The bills passed 29-8, on a bipartisan basis with unanimous Democratic votes and two GOP votes, Senators Joel Anderson and Anthony Cannella.

Ultimately, the bills transform Medi-Cal into a program that covers all low income citizens and legal residents below 133%/138% of the federal poverty level, regardless of whether they have children, disabilities or assets. Any low income citizen or legal resident who does not get affordable coverage on the job will be eligible for Medicaid. About 1.4 million Californians will become eligible for Medi-Cal and millions of families that depend on Medi-Cal today should find it easier to enroll and stay enrolled as a result of the changes in federal law implemented in these bills. As Speaker Perez said, it is “the opportunity for us to make greatest impact in coverage for the neediest of our state.”

DENTAL COVERAGE AND OTHER HEALTH ISSUES: The main budget trailer bills, SB77/AB82, which including the restoration of dental coverage, got even more bipartisan support, including a unanimous vote in the Senate, and only three GOP dissents in the Assembly.

There was broad support for the restoration of dental coverage. Senator Ted Lieu described three individual and dramatic stories of Californians without dental care, and asked for a yes vote of behalf of Boris, of Leonard, of Ruby. Senator Cannella talked about a dental clinic he visited, where the best option, without coverage, was for dentists to simply pull teeth rather than let them go untreated and get worse.

Senator Steinberg gave “thanks to the legislative branch of government” for putting targeted restorations in the budget–that for as much as this is the Governor’s budget framework, one that legislators agreed with to be fiscally prudent, it was also important prioritize the help for three million Californians who will now get dental coverage and others. He cited that is was “a victory we can celebrate for 24 hours,” because there was “more work to do,” for children with autism, to “restore the other Medi-Cal benefits that were not optional,” and to restore Medi-Cal provider rates.

Others cited other components of the trailer bill. Senator Mark Leno highlighted the extension of coverage to foster youth so they don’t age out of coverage at the end of the year, and have a gap before new coverage options kick in January 2014 under the ACA. Both Senator Leno and Senator Bill Monning celebrated the elimination of the cap of seven doctor visits a year in Medi-Cal–a cut made a few years ago but that was never approved by the federal government. They also cited that the bill will require the state to accept and get federal match for a generous contribution from The California Endowment to help with outreach in enrollment Californians in new Medi-Cal and Affordable Care Act options.

Despite the support, the bill had two GOP attempts at hostile amendments–one by Senator Anderson to include parental notification for abortions, and another by Senator Emmerson to slow and scale back the transition of Healthy Families children to Medi-Cal agreed to in last year’s budget. While the motions were table, the latter issue was the subject of much comment and support by Senators of both parties. Senator DeSaulnier said he has “second-guessed my vote to abandon” Healthy Families, and agrees with concerns. Senator Jim Beall saying legislators watching closely the transition of Healthy Families kids, telling the Administration, “you don’t get between a bear & his cubs.”

MCO TAX AND HEALTHY FAMILIES: Several Republicans, including Senators Emmerson, Walters, Cannella, Huff, and Nielsen, pointed out the problems with the transition of Healthy Families children to Medi-Cal during the debate on the managed care organization tax, which had previously gone to fund the Healthy Families program. They cited the issues of access for children with autism, in rural communities, and other transition issues. Senate President Steinberg stated he didn’t like the elimination of Healthy Families last year either, but “esteemed colleagues of the minority party, re-arguing last year’s budget will not help the people of California,” that we should be working on the future. He stated “we share the common goal to raise Medi-Cal rates,” and we can’t do that with $500 million less in the budget.

The extension of the MCO tax was for three years, rather than made permanent, helping get the neutrality of the insurers. The bills passed by the required 2/3 margins along partisan lines, with a 54-18 vote in the Assembly, and a 27-10 vote in the Senate.

COUNTY SAFETY-NET FUNDS: Another set of health trailer bills, SB80 & AB85, was for the reallocation of the county safety-net dollars, which the Governor had conditioned the Medi-Cal expansion on, and which was also packaged with an increase a modest 5% increase in CalWORKs grants, the first in many years. In the Senator, several legislators expressed concern about the impact of the cut to their counties, from Senator Cannella and Merced which has a long-term contract with a private hospital, to Senator Gaines and his counties which use the CMSP consortium to provide indigent care services. Democratic Senator Hancock announced her opposition after looking at the bill last night and the impact to public hospitals in her district. Senator Corbett said she would support the bill but express concern and wanted to follow up. The Assembly debate more focused on the CalWORKs restoration.

The measure passed with Senate 24 votes and the Assembly with 53 votes. (By this point Assemblymember Roger Hernandez had left to take a plane to be on time for his wedding in the afternoon.)

WORK LEFT TO DO: With these and other key bills passed in this Saturday session, the Assembly and Senate then adjourned, coming back Tuesday.

The passage of the Medi-Cal expansion and related issues were the biggest missing legislative pieces that needed to be done to be ready for the new coverage options in January 1, 2014–just 199 days away. But even legislative work isn’t done–a bill on the “bridge” plan, AB1x3(Hernandez) is still pending in the health reform special legislative session. Other key bills like SB639(Hernandez) on cost-sharing, SB353(Lieu) on preventing deceptive marketing, and AB880(Gomez) on employer health benefits are also moving through the regular session.

Like legislators, health and consumer advocates are also recommitting to revisit cuts to Medi-Cal provider rates and to prevent cuts to the safety-net and the remaining uninsured, county-by-county. With the major advances today, the work continues to fulfill a California vision of health reform that includes everybody and provide quality, affordable health care to all Californians.

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