Brown’s Revised Budget Includes Additional $1.2B for Medi-Cal

On Tuesday, Gov. Jerry Brown (D) released a revised fiscal year 2014-2015 budget proposal that includes an additional $1.2 billion in Medi-Cal funding to account for about 800,000 new beneficiaries who qualified for the program before the expansion under the Affordable Care Act, HealthyCal reports.

Medi-Cal is California's Medicaid program (Weintraub, HealthyCal, 5/13).

Background

Brown on Tuesday released his revised budget proposal, which includes more than $2 billion in additional spending over his initial budget proposal in January.

In addition to the increased Medi-Cal funding, the revised budget plan also includes higher spending on:

Additional contributions to CalPERS;

• Additional staffing for the state's unemployment insurance program;
• Early childhood education;
• Emergency drought assistance; and
• Increasing In-Home Supportive Services' caseloads.

In a release, Brown said the revised budget "shows that California can afford to provide health care to many more people, while at the same time paying its debts and shoring up the long-troubled teachers' retirement system."

Higher-Than-Expected Medi-Cal Enrollment

California officials had estimated that one million to two million additional residents would enroll in Medi-Cal through the end of 2014, but about 1.9 million consumers already had registered for the program by the end of March and an additional 900,000 applications are pending (California Healthline, 5/13).

About 800,000 of the new beneficiaries were eligible for the low-income health program before the ACA was implemented. The state is responsible for paying half the cost of new Medi-Cal beneficiaries who qualified for the program before the ACA went into effect (HealthyCal, 5/13).

Diana Dooley, a spokesperson for the Brown administration, said the state's outreach efforts brought previously eligible residents "out of the woodwork" to enroll in Medi-Cal (Megerian, Los Angeles Times, 5/13).

With the influx in new enrollees, California's total number of Medi-Cal beneficiaries is expected to increase to 11.5 million by 2015 -- about 30% of the state population (HealthyCal, 5/13).

Details of Medi-Cal Funding in Budget Plan

The additional $1.2 billion in funding called for under Brown's revised budget plan includes:

• $193 million for 2013-2014; and
• $918 million for 2014-2015.

The budget proposal also includes other expenditures related to the Medi-Cal program, including:

• $191.2 million in funding to expand Medi-Cal mental health and substance misuse programs;
• $187.2 million in funding for managed care rate increases; and
• $94.4 million to enhance the technology program used to determine Medi-Cal eligibility and process Covered California applications (Robertson, Sacramento Business Journal, 5/13).

Lawmakers' Reactions

Some state lawmakers applauded Brown's efforts to expand health coverage through Medi-Cal, but others said his revised budget focused too much on the program.

Assembly member Jeff Gorrell (R-Camarillo) said the revised budget "represents a responsible framework," but he added that the "dramatic increases in health care costs indicate that there are many unanswered questions in the implementation of the [ACA]."

Assembly Republican Leader Connie Conway (R-Tulare) in a release said government health care programs "will consume more and more of the state budget and eventually reduce the amount we can spend on other important priorities such as education, public safety and transportation" (Smith, "Capitol Alert," Sacramento Bee, 5/13). She also said that spending $1.2 billion in state funds on residents who previously qualified for Medi-Cal without additional federal funding is "a problem" (Duckworth, KCBS, 5/13).

Health Advocates' Reactions

Meanwhile, C. Duane Dauner, president and CEO of the California Hospital Association, in a release expressed "disappoint[ment]" that the revised budget did not reverse "looming retroactive Medi-Cal payment cuts to hospital-based skilled-nursing facilities."

Dauner said that the "omission comes at a critical time in the evolution of the Medi-Cal program" and that the cuts could "threaten access to care for millions of low-income and elderly patients" ("Capitol Alert," Sacramento Bee, 5/13).

A joint release by several health advocacy groups said the coalition was "pleased that the governor's May revision reflects the continued success of the state's expansion of Medi-Cal coverage to more children and families." However, the release added that the budget "misse[d] a golden opportunity to build a healthier California" by restoring funding for children's health programs.

The coalition includes:

• California Coverage & Health Initiatives;
• Children's Defense Fund California;
• Children Now;
• PICO California;
• The Children's Partnership; and
• United Ways of California (The Children's Partnership release, 5/13).

For more information on Brown's revised budget, see today's Capital Desk post.

Broadcast Coverage

Headlines and links to broadcast coverage of Brown's revised budget proposal are provided below.

• "Medi-Cal Enrollees Approaching One-Third of California Population" (Bartolone, "KXJZ News," Capital Public Radio, 5/13).
• "Gov. Brown Releases Revised Budget Plan" (Krasny, KQED, 5/14).
• "Brown Releases His Updated California Budget Proposal" (Orr, "KXJZ News," Capital Public Radio, 5/13).