CALIFORNIA: COURT SAYS STATE OWES COUNTIES FOR CARE
"[T]he California Supreme Court ruled Monday that countiesThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
can require the state to reimburse them for the cost of providing
health care to the poor," LOS ANGELES TIMES reports. The suit
stemmed from the state's 1982 move that eliminated "certain low-
income adults without private medical insurance from Medi-Cal."
The state provided counties with money to cover the cost of care
for these individuals until its 1989-1991 fiscal years, when it
cut the payments, "prompting San Diego County to sue." The
county said that the state owed it $22.6 million for "two years
in which the state failed to reimburse [it] fully for the cost of
medical care for the indigent."
THE RULING: In a 6-to-1 ruling, Justice Ming Chin, "said
the state should have fully reimbursed the counties for" medical
care provided for the indigent. In his ruling, Chin wrote that
the "Legislature excluded the working poor and certain other
indigents from Medi-Cal 'knowing and intending' that counties
would have to pick up the tab." The court ruled that "repayment
was required under 1979's Proposition 4, which said the state
must pay counties for mandated programs." TIMES reports that a
"state commission" will now decide how much money is owed.
POISON PILL: "But what could have been a bonanza for
counties," TIMES reports, "may wind up costing them about $900
million because of a legislative maneuver intended to discourage
counties from seeking repayment." A 1991 bill that turned
certain state programs, including "health care for the working
poor" over to the counties and "gave them sales tax and license
plate revenue to pay for the added responsibilities" also
included a "poison pill" that would revoke the license plate
revenue if San Diego won its suit. TIMES reports that it is
unclear whether the state will take away the revenue, which is
"estimated at $898 million for the next fiscal year." H.D.
Palmer, assistant director of the state Department of Finance,
said "The (court's) disposition is worded in a way that we cannot
make a definitive legal determination today as to whether and
when the poison pill would be activated."
IMPACT: Palmer said, "Clearly this ruling could have a
major impact on indigent health care funding for counties, and it
could affect broader issues involving state and local government
finances" (Dolan/Ingram/Ellis/Durazo/Lozano, 3/4). "This ruling
could open a number of significant fiscal and policy issues,"
Palmer said. He "cautioned," however, that Gov. Pete Wilson's
administration "is going to undertake a thoughtful and thorough
review of [yesterday's] ruling and determine what appropriate
policy decisions need to be made." Palmer further "noted that
the court's decision is not final for 90 days," adding that
"whatever the state does, a county could file a lawsuit
challenging the poison pill provision" (Chiang, SAN FRANCISCO