Brown Approves Budget Plan, Medi-Cal Expansion Legislation

On Thursday, Gov. Jerry Brown (D) signed into law a $96.3 billion fiscal year 2013-2014 state budget plan (AB 110) and legislation (AB X1-1) to expand Medi-Cal to more than 1.4 million state residents under the Affordable Care Act, the Los Angeles Times reports (Megerian, Los Angeles Times, 6/27).

Medi-Cal is California's Medicaid plan.

Background on Budget Plan

In May, Brown released his revised spending plan for FY 2013-2014. The proposal was a $1.3 billion reduction from the initial spending plan that he announced in January.

A Legislative Analyst's Office report later found that the state will collect $3.2 billion more in extra revenue than Brown estimated in the revised plan.

Meanwhile, separate budget plans released last month by Assembly Democrats and Senate Democrats sought more funding for safety-net programs than Brown's revised proposal.

Earlier this month, Brown and legislative Democrats reached a budget deal (California Healthline, 6/17).

The budget deal uses Brown's more conservative economic forecast, despite that Democrats had sought about $2 billion more in spending on state services and programs.

The agreement calls for:

• $206 million to improve mental health care services, including $142 million in one-time general fund money in the coming fiscal year;
• $51 million in non-general fund money in the coming fiscal year and about $150 million the following fiscal year to boost grants for CalWORKS, California's welfare-to-work program; and
• $16.9 million in general fund money in the coming fiscal year and $77 million the following fiscal year to help partially restore Denti-Cal benefits for adults.

Denti-Cal is the Medi-Cal dental program (California Healthline, 6/11).

The plan also includes an 8% cut to In-Home Supportive Services providers and an additional $206 million to develop 25 mobile crisis support teams and provide 2,000 or more beds in local treatment centers for individuals with mental health problems (Siders, Sacramento Bee, 6/28).

On June 14, the Legislature approved the plan (California Healthline, 6/17).

Background on Medi-Cal Expansion

Under the ACA, a state expansion of Medi-Cal will allow individuals with incomes up to 138% of the federal poverty level, or $15,415 annually, to gain coverage.

The federal government will fund the expansion for the first few years, according to the ACA.

Brown has said that the state should try to cover subsequent costs by reducing the amount it provides counties each year to cover health care services for uninsured individuals.

County officials have expressed concern that such proposals could have a negative effect on their safety-net health care facilities

Earlier this month, legislators approved the Medi-Cal expansion bill, which includes a provision that would allow future lawmakers to reconsider the expansion if the federal government's portion of the costs drops below 70%.

The measure also includes provisions to:

• Increase grants for beneficiaries of CalWORKS, California's welfare-to-work program; and
• Partially restore Denti-Cal benefits for low-income adults (California Healthline, 6/17).

Comments

During the signing ceremony for the two bills, Brown said, "It's a big day for Californians who don't have health care," adding, "California is the leader. The rest of the country is looking to see how we did it" (Los Angeles Times, 6/27).

Anthony Wright, director of Health Access California, estimated that the new budget replaces less than $1 billion of the $15 billion in cuts to health and human services programs that took place during the recession. However, he added, "[A] year in which we're going to expand (Medi-Cal) coverage to 1 million people is going to be more positive than negative."

State Senate President Pro Tempore Darrell Steinberg (D-Sacramento) also said that the budget is "not enough" to offset recent funding reductions, but he added that there is "no way we could make up for five, six years of devastating cuts in one year." He said the new budget is "a very good start."

Democratic lawmakers have said they might lobby Brown to make mid-year funding increases for certain programs if state revenue exceeds expectations (Sacramento Bee, 6/28).

In addition, Senate Health Committee Chair Ed Hernandez (D-West Covina) said that federal funding received for the Medi-Cal expansion "will trickle back into the economy as we address a segment of the population so much in need of health care" (Robertson, Sacramento Business Journal, 6/27).

Meanwhile, Republicans in the state said the budget does not do enough to reduce debt (Siders, "Capitol Alert," Sacramento Bee, 6/27).

Sen. Bill Emmerson (R-Hemet) said the budget relies too heavily on a temporary tax increase through Proposition 30. "If the economy does not grow sufficiently, then we're going to get another budget crisis in the future," he said (Sacramento Bee, 6/28).

Broadcast Coverage

Headlines and links to broadcast coverage of Brown signing the bills are provided below:

• "Gov. Jerry Brown Signs California Budget That Reshapes K-12 Spending" (Lin, "KPCC News," AP/KPCC, 6/27).
• "California Health Care Advocates Applaud New Budget and Medi-Cal Expansion" (Bartolone, "KXJZ News," Capitol Public Radio, 6/27).