Coalitions Propose Tax Increases to Prevent Proposed Medi-Cal Reductions, Bolster State Trauma System

Responding to Gov. Gray Davis' (D) proposed cuts to Medi-Cal, two coalitions yesterday suggested increases in taxes to "soften the blow to the health care system," the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 5/22). Davis' revised fiscal year 2002-2003 budget proposal would reduce Medi-Cal's general fund payment by $758.3 million in part to cover the state's $23.6 billion budget deficit. As a result, the state would lose about $350 million in federal matching funds (California Healthline, 5/15). In response, a group of churches released a plan that would raise $9.5 billion through various taxes to prevent the cuts. The group favors increasing vehicle-license fees, boosting personal income taxes for the wealthy and requiring assessments on property when it changes ownership. In a separate proposal, the California Medical Association, along with a group of nurses and firefighters, advocates a five-cent increase on taxes for wine, beer and liquor to funnel $500 million into the trauma care system. The coalition maintains that the state's emergency care system will have to deal with an increased number of uninsured patients as a result of the budget cuts. Under Davis' revised budget, about 250,000 residents would lose Medi-Cal coverage (San Diego Union-Tribune, 5/22). A spokesperson for the Davis administration said it is unlikely that the tax increase proposals would receive enough support from the Legislature to pass (Rojas, Sacramento Bee, 5/22).

A Los Angeles Times editorial today offers suggestions to Senate Budget Committee members, who this week will consider Davis' proposed budget. Concerning Medi-Cal, the editorial advises against a proposal by the Davis administration that would require beneficiaries to reapply for coverage four times per year instead of the current annual reapplication process. If approved, the more frequent reapplication process would reduce Medi-Cal rolls and leave counties to deal with the cost of caring for indigent patients, the editorial maintains. In particular, people with serious mental illnesses would be affected by the proposed change "because they couldn't deal with repeated applications," the editorial states (Los Angeles Times, 5/22).