Governor’s Budget May Revision Continues Health Reform Progress and Also Recession-Era Cuts to Health Care

On Friday, Governor Jerry Brown released the May Revision to his proposed 2016-17 State Budget, which continues California’s commitments on health care and health reform. It also maintains many of the cuts made to health and human services during the recession and does not make additional investments needed to reduce barriers to coverage, increase access for Medi-Cal patients, or cover the remaining uninsured.

Continued progress under health reform: The budget continues the progress California has made under the Affordable Care Act. This includes the additional steps the state has taken beyond the ACA such as, starting Monday, the Medi-Cal expansion to all children regardless of immigration status. The May Revision estimates that more children—185,000 of an estimated 250,000—will enroll and $188.2 million in general fund dollars in budgeted for this expansion.

Another notable change in the proposed May Revision would delay shifting new legal immigrants from Medi-Cal to Covered California until technical and administrative issues are resolved, which will prevent some of these individuals from inadvertently losing coverage.

No restorations to recession-era cuts: In this revised budget, the Governor continues many recession-era cuts to health and human services, including to Medi-Cal benefits and provider rate reimbursements. In 2009, key Medi-Cal benefits from podiatry to vision were eliminated and they continue to be denied in this budget. After $15 billion in HHS cuts, health advocates will continue to push to restore cuts to Medi-Cal and other public health programs. Health Access will continually update our Budget Scorecard as the legislature weighs these proposals. California should invest in removing barriers to coverage, ensuring Medi-Cal patients have access to benefits and providers, and extending care to the remaining uninsured.

Governor Brown warned about a future recession and the “zig zag reality” of up and down revenues, which he likened to “riding a tiger.” He urged caution of any new spending, “I’m going to be pretty resolute on this budget,” invoking an Aesop’s fable of the ant and the grasshopper. Health advocates invoked other aphorisms about the value of prevention, investments and against penny-wise and pound foolish decisions. They argued that California needs to better balance between preparing for the possibility of the next recession and undoing the ongoing damage from the last recession.

Estate Recovery: This budget does not address some key policy issues. For example, the budget does not remove the estate recovery provision that discourages patients from signing up for Medi-Cal coverage. SB 33 (Hernandez), which would limit Medi-Cal estate recovery, is pending in the Assembly, and would need to be considered in the budget.

Immigrant health care: While the budget includes funding committed last year to continue Health4All Kids and ensure all low-income children are eligible for Medi-Cal, our health system would be stronger if we covered all income-eligible Californian adults, regardless of immigration status. Consumer advocates will continue to push for SB 1418 (Lara) in the legislature and in the budget process, to extend Medi-Cal coverage to all Californians regardless of immigration status, and is pending in the Assembly. Also pending is SB 10 (Lara), to allow undocumented immigrants to buy a health plan through Covered California with their own money.

Revenues on the ballot this fall: Voters this fall will have their own impact on future budgets, as they decide on ballot measures that will determine if California is forced to make cuts to education, health and other vital services, or if key investments can be made. While not taking a position on the initiatives, Governor Brown made clear he projects significant deficits if the upper-income taxes from Proposition 30 were not extended, thus forcing significant cuts. By extending the existing rate on high-income earners as well as increasing the tobacco tax, Californians can prevent cuts to vital services and make the investments needed in the health care system on which we all rely.