The 2009-10 Budget Huge Hits to Health Care

On July 28th, Governor Arnold Schwarzenegger signed a package of cuts that revised the budget for the 2009- 2010 fiscal year, which began on July 1st.1 On top of billions in earlier cuts to health care and other services, including the elimination of ten Medi-Cal benefits,2 the newly revised budget includes more than $2 billion additional cuts to health care. As a result, hundreds of thousands of children will be denied health coverage and millions of Californians will face greater problems accessing and affording the health care they need. BACKGROUND: In February 2009, the Governor signed a fiscal package that included a budget for FY09-10, to close a $42 billion deficit, including some tax increases and $15 billion in spending cuts. The February package also put on the ballot a spending cap plus five other proposals (including ones to divert funding away from mental health services and health and social services for young children) that voters rejected in a May special election.3

    What Does HR 3200 Mean for the Coverage of California’s Families

    About one in every five Californians goes without health insurance, millions more have inadequate insurance, and countless more struggle with accumulating medical bills and discriminatory practices by insurers. The health reform bill in the House of Representatives, H.R. 3200, America’s Affordable Health Choices Act of 2009, would provide virtually every Californian with affordable health insurance, either on the job, through a newly created Health Exchange, through a Public Option, from Medi- Cal or improved Medicare benefits.

      Protecting Consumers From Medical Debt

      Medical debt is the one of the leading causes of bankruptcy in the United States. In fact, it is estimated that half of all mortgage foreclosures in 2008 were caused by medical debt or illness. Small business owners and the self-employed are particularly vulnerable to medical debt: for example, one-third of California farmers and ranchers report paying more than 10 percent of their income on health costs, and one in five have financial problems as a result. As the economic recession deepens, hundreds of thousands of Californians will lose their insurance coverage, and potentially face the tough choice between going into debt for medical care or dealing with the health consequences of not getting needed care.

        Budget Deal Update What We Know About Healh Care Cuts Today

        On Monday, July 20th, Governor Arnold Schwarzenegger and legislative leaders announced a budget deal. While there are no publicly available documents as of this writing, this is our best summary of the proposed health care cuts in that package, and their impacts. Check the Health Access website and blog ( for the most up-to-date information. BACKGROUND: In February 2009, the Governor signed a budget for 2009-10 that included $15 billion in spending cuts to health and other vital services, as well as a spending cap plus five other proposals subject to a special election.1 On May 19, 2009, California voters rejected the spending cap and defeated other propositions that would divert funding away from mental health services and health and social services for young children. In order to address the emergence of an additional $26.5 billion General Fund budget deficit, Governor Schwarzenegger had proposed a number of extreme changes to address it, including the elimination of Healthy Families and other key health and human service programs.2

          AB 786 (Jones) Setting Standards for Individual Health Insurance

          For the millions of Californians without access to employment-based coverage, buying health insurance on their own in the individual market is a daunting, confusing, and often expensive experience. Consumers want affordable health plans with adequate protection in case they get sick. However, given the number of products in the individual market, which vary based on what services they cover and the costs to consumers, it is nearly impossible to adequately compare insurance plans. AB 786 (Jones) would set standards and categorize plans in the individual health insurance market so that consumers can determine a plan’s value and more easily comparison shop.

            The Regulation of Discount Health Plans in California

            Over the past decade some companies began offering products known as “Discount Health Plans” that are NOT true health insurance (even though they are frequently marketed as such), but are plans that consumers pay a monthly premium for in order to receive “discounts” for some services with certain providers. • In February 2008 the Department of Managed Health Care (DMHC) released draft regulations governing business practices and consumer protections for Discount Health Plans. DMHC drafted the regulations jointly with industry representatives but without input from consumers or advocates. Health Access opposed the regulations as drafted because they would not provide any real protections for consumers. • In March 2008 DMHC held discussions with Health Access and Western Center on Law and Poverty (WCLP) regarding revisions to the regulations. • In November 2008 DMHC released revised regulations on discount health plans incorporating some, but not all, of the consumer advocate recommendations. • In December 2008 Health Access commented on the revised regulations and pushed for strengthened consumer safeguards and oversight.

              Real Cuts Real Pain Vital Medi-Cal Benefits Eliminated for over 2 Million Californians

              As part of a budget adopted by Governor Schwarzenegger and the California Legislature in February, ten categories of benefits were completely eliminated for adults in Medi-Cal.1 The elimination of these vital benefits, described below, will reduce total Medi-Cal spending by $258.8 million in the current fiscal year, of which half ($129.4m) would have been paid by the federal government. Focusing on the budget impact, however, does not adequately put into context the true impact and loss of dignity for Californians who will suffer the most when these benefits are eliminated on July 1, 2009. The benefit eliminations will significantly affect more than two million of the lowest-income Californians who depend on these services as their lifeline.2 In almost all cases, these adults live below the poverty level (earning less than ~$900 per month) and will be hit several times by the elimination of Medi-Cal benefits.

                People of Color are Living Sicker and Dying Younger in California

                ACTIONRacial and ethnic disparities in health constitute a crisis, one that requires the attention of health care providers, policymakers, and communities alike. In California, and across the nation, people of color consistently face higher rates of sickness and mortality than whites. These higher rates are experienced not just for one or two diseases, but across a very broad spectrum of illnesses and injuries.1 People of color in California are also more likely to be among the 47 million people in the U.S. without health insurance.2 Across California and nationwide, health care reform has become a key priority. Health disparities harm all members of a community, and securing a guarantee of quality, afford-able health care for everyone in America requires attention to racial disparities in health care. This report discusses some of the key health disparities in California and the United States and makes recommendations for addressing those disparities.

                  The Worst Prescription for California’s Economy

                  In order to fill California’s $24 billion budget deficit, Governor Schwarzenegger has proposed a budget that would make severe cuts to spending on vital health and human services programs. In June, the joint Budget Conference Committee approved a budget that accepted some of the Governor’s proposals, made other spending cuts, and increased revenues.1 This brief describes the significant negative economic impacts of the proposals, especially with respect to health care. Due to the nature of public health care programs and the significant financial participation of the federal government, the negative economic impacts of the cuts are significantly greater.

                    Faces of California Graduates Need Health Reform

                    Young adults between the ages of 19 and 29 are the fastest growing group without health insurance in the United States, and in California. In 2007, one out of six Californians was a young adult, however, one out of three uninsured Californians was a young adult – twice the rate! About one in four, or 1.4 million, young adults under 30 are uninsured in California, and they are disproportionately low-income, Latino, and male.1 The consequences of being uninsured, even for young adults, are significant. According to national surveys, uninsured young adults are more likely to go without seeking medical care because of costs, less likely to have a regular doctor, have limited access to care and health consequences because of it, and experience problems with existing medical bills and out-of-pocket costs.