Proposed Changes Would Ax Some Children From Medi-Cal

About 160,000 children enrolled in Medi-Cal could lose coverage under Gov. Arnold Schwarzenegger's (R) proposed budget cuts, a state health official told the Senate Budget Committee Monday, the San Diego Union-Tribune's "Newsblog" reports. Medi-Cal is California's Medicaid program.

The cuts are part of the governor's spending plan for reducing a $14.5 billion state budget deficit over the next 17 months. The plan calls for a 10% across-the-board spending cut for next fiscal year.

State health officials told the committee that despite the importance of Medi-Cal, the budget for the program is too large to exclude from the across-the-board cuts.

The proposal would have families prove that their incomes meet eligibility requirements at four points during the year, instead of the current once a year requirement.

The governor's administration maintains that the proposal reinstates a policy that was changed seven years ago. The rule change is projected to save the state $92 million, according to the Union-Tribune's "Newsblog."

If families fail to meet Medi-Cal's income eligibility requirements during the year, children will be referred to "share-of-cost Medi-Cal" or "bridged to the Healthy Families program," according to the administration. Healthy Families is California's version of the State Children's Health Insurance Program.

Sen. Darrell Steinberg (D-Sacramento), a member of the committee, said parents subject to the new rules might "be confused, disabled or unable to figure it out and will not file the paperwork, and then their children will suffer." However, Sen. Dave Cogdill (R-Modesto) said that he believed parents would undertake the task if they knew it meant providing health care to their children.

Schwarzenegger's proposed fiscal year 2008-2009 spending plan would cut $1.1 billion from Medi-Cal (Mendel, San Diego Union-Tribune, "Newsblog," 2/4). However, the actual cut could be closer to $2 billion, accounting for a loss in federal matching funds for Medi-Cal (California Healthline, 2/4). According to the Union-Tribune's "Newsblog," the state would save $540 million, much of which would come from a 10% rate cut for Medi-Cal providers.

The proposed budget would save $134 million by cutting dental services and other optional Medi-Cal benefits for beneficiaries older than 21 who are not in nursing homes.

Lawmakers criticized the proposed cuts because they could result in higher costs later. A study presented to the committee found that every $1 saved in Medi-Cal dental costs could result in a $4 increase in emergency department costs (San Diego Union-Tribune, "Newsblog," 2/4).