Calif. Could Deepen Health Cuts Amid Retraction of Federal Aid
California could pursue deeper cuts to health care and other services after congressional lawmakers backed off plans to extend $24 billion in Medicaid assistance to cash-strapped states, the Los Angeles Times reports.
The 2009 federal economic stimulus package provided extra Medicaid funding through the end of 2010. Lawmakers initially aimed to extend the Medicaid assistance through mid-2011 by including the funds in legislation (HR 4213) designed to provide unemployment aid.
However, House Democrats last week stripped the provision to keep costs down and appease fiscally conservative party members who are facing tough re-election campaigns. The bill awaits action in the Senate.
A spokesperson for Rep. Chellie Pingree (D-Maine) said Democratic leaders have assured the lawmaker that the House still plans to address the Medicaid extension.
California Budget Implications
Gov. Arnold Schwarzenegger (R) and state lawmakers had counted on receiving nearly $2 billion in federal assistance to help California close its $19.1 billion budget deficit (Simon/Halper, Los Angeles Times, 6/3).
In May, Schwarzenegger released a revised budget plan that proposes cutting:
- $750 million from the state's In-Home Supportive Services program;
- $532 million from Medi-Cal, California's Medicaid program; and
- $15 million from Healthy Families, California's Children's Health Insurance Program.
Schwarzenegger's budget proposal also calls for the elimination of CalWorks, California's welfare program (California Healthline, 5/28).
According to the Times, the total elimination of IHSS still would not offset the potential loss of federal assistance. If the state is unable to secure extra funds, observers predict that California will pursue even deeper cuts to health care and other services (Los Angeles Times, 6/3).
Controller Says State Can Pay Bills
In related news, state Controller John Chiang (D) recently assured California lawmakers that the state has enough cash to pay its bills through August, Bloomberg/BusinessWeek reports (Selway, Bloomberg/BusinessWeek, 6/2).
In a letter, Chiang said deferred payments and internal borrowing would help the state avoid issuing IOUs like it did last year.
However, Chiang warned that a budget stalemate or final budget plan that relies on "accounting gimmicks and unrealistic solutions" could lead to a return of cash shortfalls (Goldmacher, "PolitiCal," Los Angeles Times, 6/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.