Health Care Advocates Brace for Deeper Cuts in Revised Budget
On Tuesday, Gov. Arnold Schwarzenegger (R) and administration officials held separate meetings with health care advocates to warn them that the governor's revised budget will contain substantial cuts in health and human services, the San Francisco Chronicle reports (Yi, San Francisco Chronicle, 5/14).
Advocates and lobbyists told the Los Angeles Times that today's revised budget proposal will seek greater reductions to health care services than Schwarzenegger proposed in January. The additional cuts will seek to restrict eligibility for Medi-Cal and Healthy Families.
Medi-Cal is California's Medicaid program, and Healthy Families is its version of the State Children's Health Insurance Program (Halper/Rau, Los Angeles Times, 5/14).
The state's $101.8 billion expected spending plan for fiscal year 2008-2009 will not contain a number of other cuts that Schwarzenegger initially proposed, including closing state parks, releasing some inmates early and cutting more funds from education.
Schwarzenegger also is expected to propose borrowing from state lottery income to help close the deficit (Lin, Sacramento Bee, 5/14).
In his January budget proposal, the governor called for $4.7 billion in cuts to health care programs (Los Angeles Times, 5/14).
The proposal sought about $1.1 billion in reduced state funding to Medi-Cal, which would actually cost the program almost double that amount because of a loss of federal matching funds.
The governor also advocated requiring Medi-Cal beneficiaries to verify eligibility four times annually, up from once per year for children and twice annually for adults. The proposal could result in 500,000 people being dropped from Medi-Cal, according to the San Jose Mercury News (Zapler, San Jose Mercury News, 5/14).
In February, the Legislature approved and Schwarzenegger enacted a 10% reduction in state Medi-Cal reimbursement rates to providers beginning on July 1, but a coalition of health care groups and providers is suing to block the provider payment cuts from taking effect (California Healthline, 5/6).
Other proposals to scrap dental services, optical care and other optional services for adult Medi-Cal beneficiaries remain on the table (California Healthline, 2/19).
Health care advocates said they would offer strong criticism of the proposal when it is formally released today (Los Angeles Times, 5/14).
Angela Gilliard, a lobbyist for Western Center for Law and Poverty, said, "We're bracing for the worst." She added that "every time there is a budget deficit, the health and human services budget is the leading target for cuts."
Another person who was at the meeting with Schwarzenegger on the health care cuts said, "They basically told us that they know we're going to be upset but to keep our communication lines open" (San Francisco Chronicle, 5/14).
According to the Times, California's budget deficit is now estimated at $17.2 billion (Los Angeles Times, 5/14). However, the Bee reports that administration officials project the deficit to be about $15.2 billion (Sacramento Bee, 5/14).
When the governor released his initial budget plan in January, the deficit was projected to be $14.5 billion (San Francisco Chronicle, 5/14).
The rising state budget deficit means "that reductions in spending alone, as Schwarzenegger half-seriously proposed in January, won't suffice," Dan Walters writes in a column in the Sacramento Bee.
But plans to tap the state lottery for additional funds or to sell the State Compensation Insurance Fund, a state-owned workers' compensation insurer, "sound like pain-free approaches that spending advocates on the left and tax opponents on the right might embrace," Walters writes.
"All, however, would essentially be gimmicks aimed at postponing the day of fiscal reckoning" in order to "really close a permanent, structural gap," Walters writes (Walters, Sacramento Bee, 5/14).