California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Medi-Cal Faces $1.7B in Funding Cuts Under Brown’s Budget Plan

The budget proposal that Gov. Jerry Brown (D) released on Monday called for $1.7 billion in cuts to Medi-Cal, California's Medicaid program, the Contra Costa Times reports (Kleffman, Contra Costa Times, 1/11).

The cuts to Medi-Cal are part of Brown's larger plan to close the state's estimated $25.4 billion budget shortfall over the next 18 months (Jewett, California Watch, 1/10).

For additional coverage of Brown's budget proposal, see today's California Healthline article and Capitol Desk post.

Details on Medi-Cal Cuts

Alan McKay, executive director of the not-for-profit Central Coast Alliance for Health, said Brown's proposed Medi-Cal changes primarily would affect the fee-for-service system (Contra Costa Times, 1/11).

A portion of the $1.7 billion in cuts would come from increasing cost sharing for Medi-Cal beneficiaries and imposing limits on service usage. The higher cost sharing could reduce state spending by about $557 million, while the caps on service usage could reduce state spending by about $234 million (California Watch, 1/10).

To enact such spending reductions, the Medi-Cal provisions of Brown's budget plan would:

  • Limit physician visits to 10 annually and limit prescriptions to six monthly, except for lifesaving medications;
  • Set mandatory copayments for beneficiaries at $5 per physician visit, $50 per emergency department visit and $100 per day for hospital stays up to a maximum of $200;
  • Cap annual spending for health products such as hearing aids, incontinence supplies and wound care; and
  • Decline services to patients who cannot provide a copay, as long as such patients are referred to a county-level indigent health care program (Contra Costa Times, 1/11).

In addition, Brown's plan would eliminate adult day health care services to reduce state spending by $177 million. The proposal also aims to reduce state spending by more than $900 million by cutting nursing home, physician, clinic, pharmacy and medical transportation rates by 10% (California Watch, 1/10).

Concerns From Health Care Providers, Advocates

Carmella Castellano Garcia -- who leads the California Primary Care Association -- said Brown's proposed Medi-Cal cuts could place a heavy burden on the state's community health clinics, which typically serve a high number of Medi-Cal beneficiaries.

Castellano Garcia said some community health centers might be forced to close as a result of the cuts ("KPBS News," KPBS, 1/10).

Anthony Wright, executive director of Health Access California, said the cuts would negatively affect the health of individual families, the health care system and broader attempts at economic recovery (Contra Costa Times, 1/11).

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