Senate Budget Committee – 8/29/13

Yesterday the Senate Budget Committee heard AB 104 (Committee on Budget and Fiscal Review) and AB 107 (Committee on Budget and Fiscal Review). Both bills are “clean-up” bills that make technical changes to the Budget Act of 2013 – AB 104 and AB 107 makes health related technical changes.

AB 107 makes technical changes to the Budget Act that relates in part to the $25 million grant from the California Endowment to the state for outreach and enrollment to Medi-Cal eligible individuals. AB 107 passed out of committee with a vote of 10-3.

The changes contained in AB 104 deal specifically with the portion of the State Budget Act related to the county health realignment dollars.  The most significant change reflected in the bill includes the assurance that there is a hard cap on the $300 million from counties to the state.

There was significant debate in committee about the agreement reached in the budget which requires counties to choose from two funding formulas – the 60/40 split where the counties can choose to give back 60% of health realignment dollars (including the county’s maintenance of effort contribution) to the state and retain 40% of the dollars for public health and indigent care or the “hospital” or “cost-based” formula which is based on actual costs, including costs of care for the uninsured (within a cost cap to limit any expansions of services), as well as actual revenue – including that of Medi-Cal, Covered California, and other private-pay patients.  After accounting for actual costs and actual revenue, any savings are split 80/20 between the state and the counties.

The debate in Committee centered on whether or not the funding formulas outlined in the Budget adversely impact counties by creating a disincentive to maintain and/or improve upon safety-net coverage they provide.

Senator Hancock, who represents Alameda County, pointed out that Alameda County was particularly impacted because they are the only county where revenue generated from a self-imposed tax would be considered as revenue the state could take. Senator DeSaulnier, who represents a smaller portion of Alameda County, echoed the remarks of Senator Hancock and urged the committee to consider the “unique” circumstance of Alameda County. 

Alameda County testified urging the committee to consider their unique circumstance.  The County expressed that that their ability to be a leader in the area of health care and pre-enroll 90% of Medi-Cal eligible individuals into Medi-Cal, is tied directly to their ability to self-impose a sales tax.  They closed, urging the committee not take the revenue that has enabled them to provide a high level and quality of safety-net health care coverage to the people of Alameda County.

This issue also generated support from Republican members, including Senator Emmerson and Senator Nielson.  Senator Nielsen was particularly vocal about how the agreement reached in the Budget adversely impacts CMSP counties (a consortium of 35 small and rural counties) and limits their ability to provide and improve safety-net coverage.

Health Access testified on AB 104, but urged the committee to consider the unique circumstance of Alameda County. Health Access also expressed the need for additional data to assess the impact of the agreement that was reached in the Budget as it relates to the county’s ability to provide and improve upon safety-net coverage.

Following considerable debate on this topic, Senator Leno suggested that the committee hold off on a vote to give committee members more time to study the issue at hand and make an informed decision. The committee will hear the bill again next Tuesday.
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