Lawmakers OK Spending Plan, Medi-Cal Expansion Legislation

On Saturday, the California Legislature passed legislation (AB X1-1) that would expand Medi-Cal to more than 1.4 million state residents under the Affordable Care Act, the AP/San Francisco Chronicle reports. Medi-Cal is California's Medicaid program.

Approval for the expansion came after lawmakers on Friday passed the main budget bill (AB 110) detailing a $96.3 billion spending plan for fiscal year 2013-2014 (Olson/Lin, AP/San Francisco Chronicle, 6/15).

Background on Budget

Last month, Gov. Jerry Brown (D) released his revised spending plan for FY 2013-2014. The proposal was a $1.3 billion reduction from the initial spending plan that he announced in January.

A Legislative Analyst's Office report found that the state will collect $3.2 billion more in extra revenue than Brown estimated in the revised plan.

Meanwhile, separate budget plans released last month by Assembly Democrats and Senate Democrats sought more funding for safety-net programs than Brown's revised proposal.

Last week, Brown and legislative Democrats reached a budget deal for FY 2013-2014, which includes increased spending on health and human services (California Healthline, 6/11).

Details of Budget Vote

On Friday, the Legislature approved a state spending plan, retaining much of the fiscal restraint sought by Brown, the Los Angeles Times reports (Megerian/York, Los Angeles Times, 6/14).

The approved plan also sets aside $1.1 billion for a rainy day fund from the state's surplus, marking a significant difference from four years ago when the state faced a $16 billion budget deficit (Bernstein, Reuters, 6/14).

Background on Medi-Cal Expansion

Under the ACA, a state expansion of Medi-Cal would allow individuals with incomes up to 138% of the federal poverty level, or $15,415 annually, to gain coverage.

The federal government will fund the expansion for the first few years, according to the ACA.

Brown has said that the state should try to cover subsequent costs by reducing the amount it provides counties each year to cover health care services for uninsured individuals.

County officials have expressed concern that such proposals to reduce their funding could have a negative effect on their safety-net health care facilities (California Healthline, 6/6).

Details of Medi-Cal Expansion Vote

On Saturday, lawmakers approved a handful of targeted bills, including the legislation to expand Medi-Cal.

The Medi-Cal expansion bill included a provision that would allow future lawmakers to reconsider the expansion if the federal government's portion of the costs drops below 70%.

Lawmakers on Saturday also voted to:

• Increase grants for beneficiaries of CalWORKS, California's welfare-to-work program; and
• Partially restore Denti-Cal benefits for low-income adults.

Denti-Cal is Medi-Cal's dental program (AP/San Francisco Chronicle, 6/15).

Next Steps

The budget bills now go to Brown, who has until June 30 to sign the bills. The new fiscal year begins July 1 (Los Angeles Times, 6/14).

A spokesperson for Brown said the governor might exercise his line-item veto on some provisions.

Comments From Democrats

Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said, "This was the first year in many that we weren't negotiating how deep to cut and what to cut," adding, "Instead, we were negotiating about restorations, and I think the biggest debate was how fast and how much" (Reuters, 6/14).

Senate budget chair Mark Leno (D-San Francisco) said the spending plan that passed Friday was the "most encouraging and positive budget I've seen in my 11 years in the Capitol" (Los Angeles Times, 6/14).

Leno said, "We don't know for certain that this will contain the costs; that's certainly the goal. But ... we also make sure that health care is not considered a privilege of the fortunate few but as a basic human right" (AP/San Francisco Chronicle, 6/15).

Comments From Republicans

GOP lawmakers said that their voices had not been heard during the budget process, as Democrats hold a two-thirds majority in both houses and did not need Republican support.

Assembly member Rocky Chavez (R-Oceanside) said, "To not even be involved in the process of the budget, to not even know what's in it -- I have a problem with that" (Reuters, 6/14).

Sen. Ted Gaines (R-Rocklin) said, "I worry about expectations that we set out for individuals with ACA in California and having the rug pulled out from underneath us without a funding mechanism." He added, "Can we as a state handle that financial burden? I'm very concerned about this" (AP/San Francisco Chronicle, 6/15).

For more coverage on the Legislature's budget votes, see today's feature and Capitol Desk post.