California Budget Delay Puts Health Care Reform in Jeopardy

California's 40-day budget deadlock has efforts to overhaul California's health care system and other legislative priorities on the back burner, the Los Angeles Times reports.

Gov. Arnold Schwarzenegger (R) and lawmakers were expected to begin negotiating a health care reform bill after the Legislature reconvenes Aug. 20.

However, Senate President Pro Tempore Don Perata (D-Oakland) said that if a budget stalemate remains after lawmakers reconvene, "we will not be doing any legislation." He added, "No one would like to have a health care bill more than I would. But if we don't have a budget, nothing else matters."

Aaron McLear, spokesperson for Schwarzenegger, said the administration is "completely focused on the budget" and has put all other issues aside.

The governor contended that "we want to accomplish health care," among other issues, "so let's not cut off those things because of the budget." He added, "Let's just look at the whole picture and go to work" (Halper, Los Angeles Times, 8/9).

The Assembly on July 20 approved a spending plan, but the Senate fell one vote short of approval (Herdt, Ventura County Star, 8/9). Senate Republicans are holding out for more spending cuts and other demands, despite an assurance by Schwarzenegger that he would invoke his line-item veto authority to meet the Republicans' demand for cutting $700 million in spending from the budget (California Healthline, 8/3).

Assembly Speaker Fabian Núñez (D-Los Angeles), however, informed Senate Minority Leader Dick Ackerman (R-Irvine) on Wednesday that he would seek to restore spending cuts already agreed to if the Senate did not pass the budget approved by the Assembly (Ventura County Star, 8/9).

The budget stalemate has forced the state to withhold a $212 million payment to nursing homes, adult day health care centers and other Medi-Cal providers. The state last week also withheld a $228 million Medi-Cal payment as a result of the budget delay.

The payment cut-offs come after a $2 billion Medi-Cal safety-net fund was exhausted one month earlier than expected. Since it was created in 1998, the fund has not been adjusted for new accounting rules or inflation.

Earlier this year, Assembly member Audra Strickland (R-Westlake Village) introduced legislation to expand the reserve fund to $4 billion, but state officials and legislative analysts predicted that it would not be necessary (Sheppard, Los Angeles Daily News, 8/9).