Health Care Providers Hit Hard by Budget Impasse
California's longest budget standoff on record is increasing pressure on California health care providers -- many of whom cannot be paid without a state budget.
If lawmakers cannot agree on a budget by the end of the month -- a likely scenario according to many in Sacramento -- the state will owe $12 billion to government service providers.
State controller John Chiang (D) said $4.3 billion in scheduled payments already have been blocked, and a total of $11.9 billion ultimately could be blocked if no agreement is reached by Sept. 26. Service providers across the state have said further delays could put them on the brink of bankruptcy.
Some health care providers who rely on state reimbursements have borrowed money to make ends meet. Others relied on an emergency fund used to pay Medi-Cal providers when the state operates without a budget. But that pot ran dry more than a month ago.
State law prohibits certain payments from being made in the absence of a budget, so for providers of those services, the outlook is grim.
Gov. Arnold Schwarzenegger (R) rejected a proposal to release emergency funds this week, calling the plan fiscally irresponsible.
The Republican proposal also called for cutting health care benefits for undocumented immigrants and documented immigrants who have been in the U.S. for fewer than five years.