California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Medi-Cal To Face Hit From End of Stimulus Funding, Budget Cuts

Medi-Cal is poised to take a major financial hit as billions of dollars in federal stimulus funding run out on Friday and state officials await federal approval for about $1.4 billion in new cuts to the program, the San Francisco Chronicle reports. Medi-Cal is California's Medicaid program.

Stimulus Funds Run Dry

Under the 2009 federal economic stimulus package, the federal government increased its Medicaid matching rate from 50 cents on the dollar to 62 cents on the dollar.

Over the last two years, California has received about $12.4 billion of the $90 billion that the Obama administration pumped into Medicaid programs across the country to counter the effects of the economic downturn. The higher federal matching rate expires on Friday.

State Awaits Approval for Medi-Cal Cuts

Partly in response to the end of the federal stimulus funding, California lawmakers have approved Medi-Cal cuts as part of a budget package for the new fiscal year that begins Friday.

Some of the Medi-Cal changes include:

  • A new $5 copayment for physician visits and a $3 copay for prescriptions;
  • A limit of seven physician visits annually, unless a physician certifies additional visits as being medically necessary;
  • A $50 copay for emergency department visits and a $100 daily copay for hospital stays, up to a maximum of $200; and
  • A 10% reduction in Medi-Cal reimbursements to health care providers.

In addition, beneficiaries of Healthy Families -- California's Children's Health Insurance Program -- would face higher copays and premiums when the budget cuts take effect.

Although the cuts originally were slated to take effect on Friday, federal officials first must approve the changes. State officials then must provide a 60-day notice to Medi-Cal beneficiaries before the changes can be implemented (Colliver, San Francisco Chronicle, 6/30).

Additional Health-Related Cuts To Take Effect

When the budget for the new fiscal year begins on Friday, changes to other health and human services programs will take effect. Some of the changes include:

  • The elimination of California's adult day health care program, which could be replaced with a similar program that would serve fewer beneficiaries;
  • Cuts to California's In-Home Supportive Services program, which could mean that about 436,000 IHSS beneficiaries would lose about 16.5 hours monthly of in-home assistance; and
  • Funding reductions to services for people with developmental disabilities.

Under the budget plan that the Legislature passed for the upcoming fiscal year, California could enact further cuts to health and human services programs if the state fails to receive a projected $4 billion in higher-than-expected revenue (Buchanan, San Francisco Chronicle, 6/30).

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