Health Programs Could Lose Millions of Federal Funds Under State Budget Proposal, Feinstein Letter States
Funding cuts for health programs included in Gov. Arnold Schwarzenegger's (R) fiscal year 2004-2005 budget proposal would "leave hundreds of thousands of low-income residents without health care" and result in a loss of more than $800 million in federal matching funds, Sen. Dianne Feinstein (D-Calif.) wrote to Schwarzenegger in a letter Thursday, the San Francisco Chronicle reports (Coile, San Francisco Chronicle, 1/16). Schwarzenegger's budget proposal includes calls to reduce by 10% Medi-Cal reimbursement rates to providers -- in addition to a 5% rate reduction proposed by former Gov. Gray Davis (D) -- and cap enrollment in Healthy Families at its current level of about 732,000 children. The proposal also would increase monthly premiums from $9 to $15 per child for some Healthy Families beneficiaries (California Healthline, 1/15). Because the federal government matches state Medi-Cal spending and pays about $2 for each $1 that the state allocates to Healthy Families, California stands to lose about $860 million and $63 million in federal funds for Medi-Cal and Healthy Families, respectively, Feinstein aides said. In her letter, Feinstein wrote that federal funding reductions "could cost the state many multiples of the money" Schwarzenegger hopes to save, according to the Chronicle. Feinstein wrote, "I believe that capping enrollment for vital safety-net health programs for hundreds of thousands of California's poorest adults and children is 'penny wise but pound foolish.'" A spokesperson for Schwarzenegger said that the governor had not seen the letter and had no comment (San Francisco Chronicle, 1/16). In addition, about 40 people gathered in front of the state building in San Jose on Thursday to protest proposals they said would reduce access to health care for low-income residents and people with disabilities, the San Jose Mercury News reports (Portner/Mangaliman, San Jose Mercury News, 1/16). The text of Feinstein's letter is available online.
Schwarzenegger's budget is not "as cruel as the governor's critics" maintain, nor is it "very conservative," Brian Janiskee, an assistant professor of political science at California State University-San Bernardino, writes in a San Diego Union-Tribune opinion piece. Janiskee notes that the proposed cuts to social services are "only temporary" and that Schwarzenegger will "[f]ix the bureaucratic state" and "[s]ave it from disaster ... until the next great hero of the Democrats can ride in and expand the reach of government once again" (Janiskee, San Diego Union-Tribune, 1/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.