Brown’s $96.4B Revised Budget Expects More Medi-Cal Spending

On Tuesday, Gov. Jerry Brown (D) released his revised budget proposal for fiscal year 2013-2014, the New York Times reports.

The revised $96.4 billion spending plan is a $1.3 billion reduction from the initial spending plan that Brown announced in January (Onishi, New York Times, 5/14).

The governor said economic growth has been slower than he previously expected because of federal budget cuts and a higher payroll tax on employees (Siders, Sacramento Bee, 5/14).

Medi-Cal Spending

Compared with last fiscal year, Brown's budget plan anticipates $1.2 billion more in Medi-Cal spending to implement Affordable Care Act provisions. Medi-Cal is California's Medicaid program.

According to the budget plan, individuals who are newly insured under the state's Medi-Cal expansion would be offered the same benefits as individuals who already are covered by the program. In his initial budget plan, Brown did not include coverage for stays in rehabilitation facilities and other long-term care services for newly eligible beneficiaries (Megerian, Los Angeles Times, 5/14).

The revised plan also would permanently impose a tax on Medi-Cal managed care plans equivalent to the state sales tax rate, which would save the state about $343 million (Sacramento Bee, 5/14).

In addition, Brown's revised plan includes a 10% cut to Medi-Cal provider reimbursements that currently is stalled in litigation.

Meanwhile, the revised budget plan does not restore Denti-Cal benefits for adults, as some lawmakers had hoped. Denti-Cal is California's Medi-Cal dental program (Los Angeles Times, 5/14).

Other Health-Related Budget Items

Additional health and human services-related items in the revised budget plan include:

• An increase of $200 million in spending for the In-Home Supportive Services program, which provides services for the elderly and people who are blind or have disabilities;
• $142 million to expand county-run job services and case management through CalWORKs -- the state's welfare-to-work program -- and an additional $48 million to identify potential employment barriers and subsidize employers who hire CalWORKs beneficiaries (Sacramento Bee, 5/14); and
• $72 million in restored funding for county probation departments to help counties that have housed more inmates as part of efforts to curb overcrowding in state prisons and improve inmate health care (Los Angeles Times, 5/14).

Reaction From Lawmakers

Assembly Budget Committee Chair Bob Blumenfield (D-Los Angeles) said, "Our economy is showing signs of recovery, but our budget is sending us mixed signals." He added, "The modest surplus we now possess took a lot of sacrifice to obtain, and we cannot squander it."

Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said that, overall, the revised budget is a "refreshing change." However, he said, "It's important that we also begin making up for some of the damage done to tens of thousands of Californians" when health and human services were cut in past years.

Senate Minority Leader Robert Huff (R-Diamond Bar) said he shares a common belief with the governor that California cannot return to "a culture of overspending that drives new budget crises." Huff added that Brown's biggest challenges will be in restraining Democratic legislators' "growing wish list of new spending."

Assembly Budget Committee Vice Chair Jeff Gorell (R-Camarillo) said, "It is appropriate that the governor is making conservative projections for state revenues." He added that Brown should "lay the groundwork for a rainy day fund that would smooth out the volatile tax revenue that California receives" (Van Oot, "Capitol Alert," Sacramento Bee, 5/14).

Reaction From Health Care Stakeholders

Paul Phinney -- president of the California Medical Association -- said that the "[e]xpansion of Medicaid in California is a step in the right direction." He added, "However, without restoring the proposed [reimbursement] rate cut to the California system, ACA in California may be nothing more than an empty promise with an insurance card" (Robertson, Sacramento Business Journal, 5/14).

Carmella Gutierrez -- president of Californians for Patient Care -- said she is "deeply disappointed" by Brown's decision not to reverse Medi-Cal reimbursement cuts.

Gutierrez said, "With California's elderly population increasing, the viability of community providers will take on even greater importance." She added that while the state prepares to expand Medi-Cal, many health care providers no longer can afford to serve beneficiaries ("Capitol Alert," Sacramento Bee, 5/14).

Editorial Coverage

Headlines and links to editorial coverage of Brown's revised budget proposal are provided below:

• "Editorial: Can Jerry Brown Slow the 'Spending Machine?" (Orange County Register, 5/14).
• "Editorial: Brown Is Wise To Set Frugal Tone in Budget" (Sacramento Bee, 5/15).

Broadcast Coverage

On Tuesday, Capital Public Radio's "KXJZ News" reported on Brown's release of the revised budget proposal (Bartolone, "KXJZ News," Capital Public Radio, 5/14).

For more coverage on the revised budget plan, check out today's "Capitol Desk" post.