San Diego Union-Tribune Editorial Praises Delay on Medi-Cal Reform Proposal

Gov. Arnold Schwarzenegger (R) has "precious little margin for error" in efforts to reform Medi-Cal, and his decision to delay his proposal "makes sense on several levels, not the least of which is that it is the humane thing to do," a San Diego Union-Tribune editorial states (San Diego Union-Tribune, 8/9). Schwarzenegger last week said that he would delay until January the release of his Medi-Cal reform proposal, which he was expected to release on Aug. 2.

In May, Schwarzenegger said that his proposal would reduce state Medi-Cal expenditures by $400 million in 2005. Schwarzenegger administration officials also have discussed proposals that would add monthly premiums and copayments for some Medi-Cal beneficiaries and move some elderly, blind and disabled beneficiaries into managed care programs, which could save the state $100 million annually. The state must receive approval for the proposal from the federal government.

Administration officials have said the cost of Medi-Cal, which serves 6.7 million state residents, has increased by 41% over the past five years. California spends about $3 billion annually on Medi-Cal. Administration officials attributed the decision to the delay proposal to objections raised by public hospitals about a provision related to the Medi-Cal reimbursement formula that could reduce their federal funds by half (California Healthline, 8/3).

According to the editorial, "fine tuning" Medi-Cal reimbursements for public hospitals without "putting the hospitals' financial stability at risk" likely will prove one of the "toughest tasks" in the proposal, but the provision "is crucial if they are to continue treating the needy." In addition, the Schwarzenegger administration likely will face "a recalcitrant federal government," although the likelihood that the state will receive federal approval for the proposal "could be greatly improved with the ascension of a popular Republican governor," the editorial states. The editorial concludes that the "biggest hurdle remains the Democratic-controlled legislature," and Schwarzenegger must convince lawmakers who view efforts to reform Medi-Cal "as harming the poor" that the proposal is "fundamental to its survival" (San Diego Union-Tribune, 8/9).