Full Analysis on #CABudget Conference Committee Actions on Health

Monday, June 10, 2013


* Big decisions made Monday night, as California Constitutional deadline for the Legislature to pass the 2013-14 budget is at the end of this week, January 15.
* Budget Conference Committee votes for partial restoration of dental and enteral nutrition benefits to start May 2014, as well as mental health and former foster youth coverage; Does not restore Medi-Cal provider rates, autism coverage for former Healthy Families kids, etc.
* Budget likely to include cut to county health safety-net of $300 million in first six months; Mechanism would take as much as 60% of $1.8 billion from public health and county safety net like public hospitals, clinics & low-income health programs. Hundreds of thousands of undocumented & other remaining uninsured residents would be excluded in some counties.
* Budget and county fund deal clears way for Medi-Cal expansion bills, SB 1×1 and AB 1×1, which would maximize benefit for California, up in Assembly and Senate Health Committees this week Tuesday and Wednesday; Differences with Governor narrow but remain.

This evening, the Budget Conference Committee of the California Legislature made public key decisions about the 2013-14 budget, which includes partially restoring dental services for over three million adult Californians with Medi-Cal coverage—while making cuts to the county safety net of public hospitals, clinics, and low-income health programs for the remaining uninsured.

Tasked with resolving differences between the two houses of the Legislature as well as the Governor, the Budget Conference Committee was made up of Democratic Senators Mark Leno, Sen. Kevin De Leon and Loni Hancock; Republican Senator Bill Emmerson; Democratic Assemblymembers Bob Blumenfield, Holly Mitchell, and Republican Assemblymember Jeff Gorell. They started by agreeing to accept the Governor’s more conservative revenue estimates, but many legislators hope they could revisit approved cuts when they see additional revenues come in.

DENTI-CAL: The committee decided to partially restore dental coverage for over three million adults with Medi-Cal coverage, starting in May 2014. The coverage would include preventative care and full dentures, but not partial dentures or other specific services, costing $77 million/year (as opposed to the $131 million/year for full restoration.) The cost for the budget year is $16 million given the late start date.

Legislators and advocates argued it is fiscally responsible for California to restore dental care to low-income Californians, a targeted investment that provides desperately needed help to families still struggling economically, while it also draws down new federal dollars, and prevents people in agony needing dental surgery at more expensive emergency rooms. Like other Medi-Cal benefits, the costs would be matched 50-50 by federal dollars, and starting in 2014, benefits for the over one million newly eligible will be 100% funded by the federal government.

OTHER RESTORATIONS AND “FUTURE TO DO LISTS”: Other partial restorations approved by the Budget Conference Committee included:
· Restoring Medi-Cal enteral nutrition benefits for patients who cannot chew, to reverse a 2011 cut, to be restored on May 2014; ($13.6 million general fund annually, but $1.7 million due to delayed start date.)
· Covering former foster youth up to age 26 with Medi-Cal until January 1, 2014 when the Affordable Care Act kicks in. ($3 million general fund)
   The Committee also made specific investments in mental health programs, and in partially restoring CalWORKs welfare-to-work grants.

That said, the legislator did express regret in other areas, where they felt they were not able to restore services at this time. Proposals were NOT restored include:
* Applied Behavioral Analysis services to Medi-Cal managed care plans for several hundred children swtiched from Healthy Families who not eligible for regional center services; ($50 million general fund)
* Medi-Cal rates for distinct part nursing facilities ($32 million general fund), or any other part of the 10% Medi-Cal provider rate cut made in 2010.

Decisions that were made last week included making the Managed Care Organization (MCO) tax permanent, and officially eliminating the limit of seven doctor visits passed in 2011, which the federal government had never approved and never went into effect.

The constitutional deadline for passing budgets is June 15, the end of next week. Those interested can listen to floor debates in the next few days on the Internet, or on the California Channel.

COUNTY SAFETY-NET CUTS: Apart from the issues discussed in Budget Conference Committee, the budget is expected to include a new agreement between state and counties that would cut $300 million out of county public health and safety-net services. In future years, the deal allows the state to cut as much as 60% of the $1.8 billion in county health care dollars that support public health and the county safety-net of public hospitals, clinics, and indigent care programs. The Governor had conditioned the Medi-Cal expansion in the Affordable Care Act on a reallocation of county safety-net dollars.

Health advocates were dismayed that the budget would state funds to care and cover those who remain uninsured, including undocumented immigrants–and undermine California’s ability to fulfill a vision of health reform that includes everybody. In particular, the proposal would give counties a one-time choice:

· Allow the state government to take back 60% of the county’s allocation of roughly $1.8 billion in health funds–both the $1.4 billion of state health realignment funds and the county’s roughly $400 million in maintenance-of-effort health spending, leaving just 40% for all public health and indigent care; OR

· Have the state take savings, but allow for a “true-up” with a formula that take into account a county health system’s revenues and expenses. A cost cap would not allow reimbursements for new facilities or services, or even reorienting of programs to those who are remaining uninsured who hadn’t been served previously. The state would take 80% of any savings, leaving just 20% to the counties to use for improvements or expansions in service. Many counties with public hospitals are expected to take this “cost formula” approach.

Early rough estimates by Health Access are that hundreds of thousands of remaining uninsured Californians, including those who are undocumented immigrants, will be excluded from safety-net care or coverage using these health realignment funds in many counties into the future.

While the agreement is less than the $1.3 billion that Governor Brown originally sought to take, the plan would reduce the capacity of the county safety-net. It would let many county Low-Income Health Programs, and the capacity to cover well over 150,000 Californians, to expire when their current enrollees get shifted to Medi-Cal in January 2014. (Health Access calculated this estimate using the most recent LIHP enrollment figures of counties that will likely not have the state resources to continue at the same level.) Advocates raised concerns that the agreement widens the disparities between the counties and what they do for the remaining uninsured.

More details on the county safety-net funding piece are expected to be forthcoming in the next few days.

MOVING FORWARD ON MEDI-CAL AND THE ACA: Ultimately, this budget allows California to move forward in taking federal dollars to expand Medi-Cal and to restore dental services, bringing new and needed help to millions of Californians. It also includes two important items discussed in the Medi-Cal expansion legislation:
* extension of Medi-Cal coverage for newly qualified legal immigrant parents (2.8 million), and the
* inclusion of basic mental health services and enhanced substance abuse disorder services in Medi-Cal (66.7 million).

Given that the Governor had conditioned the Medi-Cal expansion in the Affordable Care Act on a reallocation of county safety-net dollars, this deal allows the work of ACA implementation to advance.

As part of state-county negotiations, there was no agreement on a county-based Medi-Cal expansion or a programmatic realignment or “swap” of human services–all items that the Legislative Analyst’s Office said would distract from the important work of implementing the Affordable Care Act and the Medi-Cal expansion.

With these major issues addressed, the work continues on the Medi-Cal expansion. This week, key special session Medi-Cal expansion bills, ABX1 1 and SBX1 1, will be heard in Assembly and Senate Health Committees this week. While they are still significant differences to work out, the Governor and the Legislature are now moved closer to a resolution to take advantage of this historic opportunity to improve the health system we all rely on. Health Access and other consumer advocates support these bills in their form as they are considered by these committees this week:

* SBx1 1 (Hernandez): Assembly Health Committee: Tuesday June 11, 2013, 1:30pm, Room 4202
* ABx1 1 (Speaker Perez): Senate Health Committee: Wednesday June 12, 2013, 1:30pm, Room 4203

Even with this budget agreement, significant work continues in the effort to implement and improve upon the Affordable Care Act in California.

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