Major Federal Help Needed To Prevent Massive Cuts To Health and Other Vital Services

Today, the California Department of Finance released new data showing the depth of the economic impact due to the COVID-19 crisis, in many ways greater the Great Recession a decade ago, leading to an estimated $54 billion shortfall for the state of California in the current and budget year.
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For Immediate Release: Thursday, May 7, 2020

CONTACT:
Rachel Linn Gish, Director of Communications, Health Access California, rlinngish@health-access.org, 916-532-2128 (cell)
Anthony Wright, Executive Director, Health Access California, awright@health-access.org, 916-870-4782 (cell)

MAJOR FEDERAL HELP NEEDED TO PREVENT MASSIVE CUTS TO HEALTH AND OTHER VITAL SERVICES

NEW STATE FINANCE ESTIMATES SHOWS $54 BILLION CA BUDGET HOLE CAUSED BY COVID-19

Health and Community Advocates Urge That California Keep Its Commitments to Health Coverage and Care

 Over 50 Health & Community Groups Sent a Letter to Congress Asking for Additional Action on State Relief, As Well As Other Patient Protections and Priorities

SACRAMENTO, CA – Today, the California Department of Finance released new data showing the depth of the economic impact due to the COVID-19 crisis, in many ways greater the Great Recession a decade ago, leading to an estimated $54 billion shortfall for the state of California in the current and budget year. The budget projections threaten significant state budget cuts with massive impacts to health care in the middle of a pandemic, unless federal help is provided.

“This state budget shortfall threatens cataclysmic cuts to health and other vital services at exactly the time during a pandemic when we need them the most,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition, a veteran of past state budget crises during the Great Recession and before. “California has taken major strides in expanding access to care and coverage and those must be maintained to ensure we can keep Californians healthy and thriving. Communities already suffering from the health and economic consequences of the pandemic cannot withstand any more cuts to vital safety net programs and services.”

THE NEED FOR FEDERAL HELP: Health Access, along with a coalition of over 50 organizations, recently sent a letter to California Congressional leaders urging state fiscal relief, as well as other patient protections and priorities, and Health Access then followed up with it’s own letter. On state aid, advocates seek $500 billion in state aid (not including aid to locals), as well as an increase in the federal Medicaid matching rate to 12%, to be continued not just until the end of the public health emergency, but the likely longer-lasting economic emergency. In previous years, such help also came with a “maintenance of effort” requirement so that states do not cut Medicaid at the same time. Such aid and requirements helped prevent eligibility cuts ten years ago.

“Every state, including California, will desperately need federal aid, which is best done as a bigger and longer increase in Medicaid matching funds. California did the right thing and built a strong budget reserve over the last ten years, but even our state will need significant help from the federal government, just as in past economic downturns,” said Wright. “Congress needs to take urgent action to help states prevent catastrophic and counterproductive cuts, that would otherwise stymie our recovery efforts – both for our public health and our economy.”

HEALTH COVERAGE PRIORITIES IN THIS BUDGET: “The irony is that this budget shortfall creates immense pressure to cut Californians health care at exactly the time when access to coverage and care is key to resolving this public health emergency,” said Wright. “We are opposed to health cuts, especially in the middle of a pandemic. Cutting access and affordability to health care in the middle of a public health emergency is unthinkable and ill-advised.”

“At the very least, state policymakers should ensure the continuation of funding secured last year that helps Californians afford health insurance in Covered California which is even more crucial now that so many have lost employer-based coverage. California needs to continue its commitment to the state subsidies already allocated for affordability assistance for Covered California plans,” said Wright. “California can best contain the coronavirus if everyone is covered and unafraid to get the testing and treatment they need. While California prioritizes solving the public health emergency, the Governor should continue to pursue his prior proposal to cover the at-risk group that is currently excluded from coverage, and expand Medi-Cal to all income eligible seniors regardless of immigration status.”

REMEMBERING PAST CUTS OF THE GREAT RECESSION: “COVID-19 has created an economic crisis multiple times worse than the Great Recession, when California made major cuts to health and human services, some of which were never fully restored. Ten years ago, the state cut dental, vision, and ten medically necessary benefits from Medi-Cal, and cut Medi-Cal provider rates to some of the lowest in the country,” said Wright. “Both Democratic and Republican Governors proposed major cuts to health care eligibility and enrollment, and it was because of federal aid and requirements that we prevented the worst of those proposals, even as we suffered significant cuts.”

“The big difference between a decade ago and now is that public health is at the center of this crisis. A public health emergency created this crisis, the loss of revenue to the health care sector is deepening this crisis, and maintaining commitments to health care is part of the solution to get out of this crisis.”

Additional resources:

CA Coalition Letter to Congress (April 15, 2020)

Health Access Letter to Congress (May 1, 2020)

Health Access Factsheet: State & Federal Responses to COVID-19

Learn more about Californians’ coverage options and protections here: https://health-access.org/covid-19-resources-and-information/

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