IHSS, Healthy Families Could Face Elimination in Budget Plan

On Friday, Gov. Arnold Schwarzenegger (R) is expected to release a revised budget plan that officials say could include the wholesale elimination of certain state health programs to address California's $18.6 billion budget deficit, the Los Angeles Times reports.

Administration officials declined to name which programs the governor intends to abolish. However, unnamed officials involved in the budget process told the Times that the budget plan likely will eliminate California's In-Home Supportive Services program.

Schwarzenegger also might consider dismantling Healthy Families, California's Children's Health Insurance Program.  In January, the administration threatened to end the program if California's budget situation did not improve.

Courts Restrict Governor's Prior Cuts

During the last two years, federal courts repeatedly have reversed about $2.4 billion in program cuts approved by Schwarzenegger and the Legislature.

The rulings prevented the state from scaling back IHSS and other programs that receive federal support because such programs must meet certain federal requirements.

If California dismantled IHSS, it would forfeit the program's federal Medicaid funds, as well as the requirements that come with them. Federal courts, therefore, would lack the ability to review and overturn the program's elimination.

U.S. Supreme Court

California has asked the U.S. Supreme Court to review the lower court rulings that overturned the earlier program cuts. Twenty-two states have signed on to a petition supporting the effort.

The Supreme Court is expected to decide whether to hear the case next month.

Looming Conflicts

Schwarzenegger's proposals are expected to face a tough fight in the Legislature, where there is limited support for dismantling health care programs (Goldmacher/Halper, Los Angeles Times, 5/12).

Democratic lawmakers, who hold the majority in the state Assembly and Senate, primarily favor tax increases to balance the budget (Christie, Reuters, 5/12).

This week, Assembly Speaker John Pérez (D-Los Angeles) said "everything has to be on the table" in the upcoming budget negotiations, but added that the state should limit cuts to its safety net (York, Capitol Weekly, 5/13).

California must pass its budget by July 1, the start of the next fiscal year. Many analysts expect negotiations to continue past that date (Reuters, 5/12).